News from Notch Consulting, Inc.

September 21, 2017

Cabot Opens Asia Technology Center in Shanghai

Filed under: Carbon Black, Rubber — Notch @ 12:51 pm

On September 14, Cabot Corporation officially opened its new Asia technology center on the campus of its regional headquarters in Shanghai.

The nearly 48,500-sq.-ft. technology center will enhance Cabot’s application development capabilities and will provide a “collaboration platform to deliver innovative solutions” to customers throughout Asia Pacific.

Bringing together approximately 30 researchers and scientists from all of Cabot’s businesses, the lab will support Cabot product lines including rubber and specialty carbons, fumed metal oxides, masterbatch and compounds, activated carbon and inkjet colorants with testing and development capabilities that closely represent Cabot’s customer applications.

“This investment in China is strategically important to our ability to deliver on our vision and goal of driving application innovation with our customers by developing solutions that deliver advanced performance,” President and CEO Sean Keohane said.

Read the full press release here.

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September 8, 2017

Safic-Alcan extends carbon black deal with Orion

Filed under: Carbon Black — Notch @ 12:57 pm

Safic-Alcan Deutschland and Safic-Alcan Belgium, subsidiaries of the Safic-Alcan Group, have announced an extended distribution agreement with Orion Engineered Carbons effective October 1st.

The new agreement will focus on distribution to rubber customers and will include the regions DACH (Germany, Austria and Switzerland) and Benelux, in addition to the already-covered regions of France and the UK.

“With this step, we underline our commitment to the rubber industry and are confident that the excellent service offered by Safic-Alcan is ideally suited to the performance of our products,” stated Udo Engels, Vice President EMEA, Rubber Carbon Black, Orion Engineered Carbons GmbH.

The full press release can be found here(pdf).

Birla Carbon’s greenfield plant commences operations in China

Filed under: Carbon Black — Notch @ 12:17 pm

Birla Carbon announced today that it has started operations at its greenfield carbon black facility in Jining, China.

Said Mr. Kumar Mangalam Birla, Chairman, Aditya Birla Group, “While the Aditya Birla Group has always had a presence in China, we have not leveraged the potential that both we as a Group and China as a marketplace had to offer. We are delighted to have finally taken the right step to invest in a meaningful way in this great country of culture, history and civilization.” He further stated, “The Jining plant is well ahead of its time, whether it be the manufacturing processes involved or the environmental standards it follows. Everything that we have learned over our 150 plus years of manufacturing carbon black around the world has been poured into this facility. It is, in a manner of speaking, our magnum opus.”

China is one of the largest and fastest-growing markets for carbon black with a forecast to grow at a CAGR of 7% by 2021. The new production plant will exclusively cater to the Chinese customer base and will accommodate the growing demands for superior quality, technical solutions and performance.

The Birla Carbon Jining plant will produce traditional ASTM (American Society for Testing and Materials) grades and specific Birla Carbon grades for customers in China. The ASTM grades will focus on the tire industry while many of the Birla Carbon grades will support mechanical rubber goods and other customer requirements.

The plant, which currently has an installed capacity of 120,000 metric tons, will expand to 240,000 metric tons in phase 2.

Read full press release here.

August 31, 2017

Impact of Hurricane Harvey on US Carbon Black industry

Filed under: Carbon Black — Notch @ 8:49 pm

My thoughts and prayers go out to all of the people affected by Hurricane Harvey. The images of not only the devastation but also the resilience and generosity of the people of Texas and Louisiana is humbling.

Here is an update on the effect that the hurricane is having on the US carbon black industry. Concern has been high as nearly 80% of US carbon black capacity is located in Texas and Louisiana and supplies in the US market are already tight.

As of Thursday morning, Harvey — now downgraded to a Tropical Depression — was over northern Louisiana on a northeasterly route that will take it through northern Mississippi and central Tennessee and into West Virginia/southern Ohio by Friday evening. The storm made its final landfall around 3:30 AM CDT Wednesday morning near Cameron, Louisiana, which is about 240 miles west of New Orleans.

The path of the storm raised concerns about four CB plants:

  • Orion Engineered Carbons’ plants in Orange, TX and Ivanhoe, LA
  • Cabot Corporation’s plant in Franklin, LA, and
  • Columbian Chemicals’ plant in Franklin, LA

Of these, Orion’s Orange, TX plant was most directly in the storm’s path. On Wednesday afternoon, company sources indicated that Orange had to be shut down temporarily due to an external power outage. Around noon on Thursday, company sources said that power would be restored on Thursday afternoon and the plant restart process would begin immediately thereafter. The plant itself sustained no damage, and raw material supplies are secure. The three coastal Louisiana plants (Orion Ivanhoe, Cabot Franklin, and Columbian Franklin), which are grouped close together just west of New Orleans, were largely unaffected.

Additionally, two US CB suppliers with office space in Houston reported no flooding and expected office hours to resume soon.

With carbon black capacity largely unaffected, the longer term effects of the storm relate to three issues:

1. Feedstock issues: more than 30% of US refining capacity was directly affected by the storm, particularly in the Houston, Corpus Christi, and Baytown areas but also in Beaumont and Port Arthur. Potential issues include flooding, disrupted crude oil supplies, and power outages. Despite these issues, as of Thursday, none of the CB suppliers I spoke with had been notified of potential problems with feedstock deliveries, but obviously those issues may still arise as refining capacity is assessed.

2. Other raw material issues: It is possible that the storm may cause shortages of other key raw materials, including butadiene and synthetic rubber, and that may cause problems for tire plants that would affect carbon black deliveries.

3. Logistical issues: Shipping channels, rail lines, and trucking routes have been affected by flooding. No word yet on severity, but obviously these issues could reverberate down the entire supply chain over the next few weeks.

 

August 30, 2017

Pyrolyx begins construction of recovered carbon black plant in U.S.

Filed under: Carbon Black, Tire Recycling — Notch @ 10:42 am

Pyrolyx A.G. has begun construction of a recovered carbon black plant in Terre Haute, Indiana. The German company said once fully operational, the facility can produce nearly 13 metric tons of carbon black per year at full capacity and will be capable of recycling about 4 million tires a year, with a staff of 55.

Pyrolyx will finance the project with the proceeds of $30.2 million in Economic Development Solid Waste Facility Revenue Bonds issued by a U.S. subsidiary, Pyrolyx USA Indiana L.L.C., the company said.

Niels Raeder, CEO of the Pyrolyx Group said: “By building its second plant – now in the USA, the Pyrolyx Group is emphasizing its global expansion plans. The increase in its production capacity will uniquely allow Pyrolyx to meet the growing demand for recovered carbon black. Even before construction begins, we have signed long-term purchase contracts for Pyrolyx rCB.”

Pyrolyx expects the plant to be in operation by May 2019.

Read the full press release here.

Sourced article found here.

Tokai acquires full ownership of TCP

Filed under: Carbon Black — Notch @ 10:14 am

With the purchase of the 5% stake it had not already owned, Tokai Carbon Corp. has acquired full ownership of Thai Tokai Carbon Product Co. Ltd. (TCP).

TCP was established in 1989 as a carbon black manufacturing and selling company through a joint venture consisting of several companies in Thailand.

In 1990, Tokai Carbon started a technology licensing agreement with TCP and acquired a 25% interest. It subsequently acquired 95% ownership.

Making TCP a wholly owned.

Sourced article found here (subscription required).

August 16, 2017

Supply issues hit North American carbon black industry

Filed under: Carbon Black — Notch @ 6:00 am

The US carbon black market has seen some turmoil over the three weeks due to operational issues at Continental Carbon’s carbon black factory in Ponca City, Oklahoma. Here is Notch Consulting’s understanding of what is happening:

  • The carbon black factory in Ponca City receives feedstock via pipeline from the Phillips 66 refinery also located in Ponca City.
  • The carbon black plant also receives feedstock by tanker truck from various suppliers.
  • The Phillips refinery previously announced a major scheduled turnaround from September to October. However, Phillips initiated the shutdown of the decant operations earlier than expected (late July), and the shutdown now will extend through December 1.
  • Phillips 66 shut off feedstock supply to the carbon black plant during the last week of July.
  • CBO will not be available from the refinery during this period (i.e., through December 1).
  • Continental Carbon declared force majeure for the Ponca plant on August 2.
  • Continental Carbon reports that the Ponca plant will remain operational during this period. The plant is working to bring in replacement feedstock but details are still under development at this time.

This development comes on the heels of Orion’s announcement earlier this month that it plans to mothball one production line at its Orange, TX at the end of 2017. These two developments have raised serious concerns about carbon black supply in the United States over both the short and long term. Notch Consulting estimates that $5.2 billion will be spent in the United States on new tire production capacity from 2016 through the end of 2021, including new tire factories from Continental, Giti, Hankook, Kumho, Nokian, Qingdao Sentury, and Wanli, as well as major expansions from Bridgestone, Continental, Goodyear, Sumitomo, Toyo, and Yokohama. Obviously these expansions will put a strain on existing supply, particularly as no capacity expansions have been announced for the region and three of the five domestic producers of carbon black are in talks with the EPA regarding new emission standards (which could potentially lead to the closure of some capacity).

Notch Consulting this month is publishing the new edition of its Carbon Black World Data Book, which covers global supply and demand in this $13 billion industry. This year’s edition will include a special report on conditions in the North American market given recent events, including near and long-term scenarios for imports and domestic supply. Contact Notch at info @ notchconsulting.com for details or to order.

August 10, 2017

Phillips Carbon Black announces capacity expansion

Filed under: Carbon Black — Notch @ 9:19 pm

Phillips Carbon Black, India’s largest carbon black producer, announced today a plan to invest Rs 300 crore (US$47M) in the current fiscal year to increase carbon black capacity by 80,000 tons at its plants in Mundra and Palej by March 2019. The project will raise PCBL’s total capacity to 560,000 tons. The company reported that it used 98% of its 480,000 tons of currently installed capacity last year. PCBL is also considering a new greenfield carbon black plant of 120,000 tons to be located in Tamil Nadu or Andhra Pradesh. The company already owns a 60-acre plot in Tamil Nadu, which makes it the most likely location, though Andhra Pradesh is also under consideration. Both states are in southeastern India. Previously, PCBL announced plans to install a new production line dedicated to specialty blacks at its plant in Palej. This project is separate from the above announcement.

August 1, 2017

Indian tire company, Balkrishna Industries, announces carbon black plant

Filed under: Carbon Black, Tires — Notch @ 6:30 am

An Indian tire company, Balkrishna Industries Ltd. (Mumbai, India), has announced a new project to build a 60,000 ton/year carbon black plant at its plant in Bhuj, Gujarat, India. No completion date was announced. The budget for the project is Rs 150 crore (US$23 million). Balkrishna produces tires mainly for specialty markets, focusing on off-the-road, earthmover, agricultural, industrial, ATV, and lawn/garden equipment tires. Annual sales total US$850M, according to the company.

July 31, 2017

Orion announces carbon black price increase and capacity reduction for US

Filed under: Carbon Black — Notch @ 11:23 am

On Friday, Orion Engineered Carbons announced two actions:

1, A price increase of five cents per pound on all rubber carbon blacks sold in the US. The increase is effective September 1, 2017 or as contracts allow. On the price increase, Orion’s Vice President, Rubber Carbon Blacks Business Line, Christ Erickson, said, “This increase in pricing and the investments in production are necessary to ensure our long term supply capability.”

2. In addition, Orion announced the idling of one Rubber Carbon Black production line at its Orange, Texas facility, effective at year end 2017. The press release stated, “Orion is taking this action because current price levels of Rubber Carbon Blacks in North America do not adequately address the costs of maintaining this production capacity.” Orion did not publicly announce the amount of capacity being removed.

Here is the press release.

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