News from Notch Consulting, Inc.

September 18, 2020

Bridgestone closing French tire plant in 2021

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Notch @ 1:44 pm

On September 16, Bridgestone Corporation announced plans to cease production at its 60-year-old passenger tire plant in Bethune, France in 2021. The company said the decision came in response to the challenging long-term outlook for the European passenger tire market, and that the closure represents the only viable path to safeguard the competitiveness of Bridgestone’s operations in Europe. All manufacturing operations at the site would cease, affecting 863 workers.

The current industry context for passenger tyres is threatening Bridgestone’s competitiveness in the European market. For the last several years, the market for passenger tyres has been facing strong headwinds – even without taking into account the impact of the COVID-19 pandemic. The passenger tyre market has seen its volumes stabilize over the last few years (average annual growth < 1%) while competition from low-cost Asian brands continues to increase (market share of 6% in 2000 increased to 25% in 2018) leading to general production overcapacity. This has resulted in pressure on pricing and margins, as well as overcapacity in the Low Rim Diameter segment, given a declining demand in LRD. And within Bridgestone’s overall European footprint, the Bethune plant is the least well positioned and least competitive.

Over the last years, Bridgestone has taken several measures, including attempts to increase the competitiveness of the Bethune plant. These have proven to be insufficient and Bridgestone has been losing money on tyres produced in Bethune for several years. Considering the current market dynamics, no improvement in the situation is foreseeable.

The decision drew immediate protest from the union and workers, who protested outside the plant the day following the announcement.

September 15, 2020

Tokai Carbon CB raising carbon black prices in the US

Filed under: Carbon Black — Notch @ 8:37 am

Effective October 1, or as customer contracts allow, Tokai Carbon CB Ltd. will increase prices for all carbon black products produced in the United States by $40 to $50/metric ton (1.8 to 2.27 cents/pound). The EPA charge of $88.00/ton (4 cents/pound) will remain in effect. The company said that the price change will support the continued increasing cost of operations, labor, and environmental compliance.

Here is the press release.

 

 

 

August 31, 2020

Further update on Hurricane Laura

Filed under: Carbon Black, General — Notch @ 1:01 pm

As of 7 AM, Monday, August 31, here is the status of Orion Engineered Carbon’s two US plants affected by Hurricane Laura:

  1. Ivanhoe, LA
    • We now have full access to the plant
    • Both power and gas supply have been restored
    • Plant is now on startup as of yesterday [Sunday] and should be producing certain grades later today [Monday].
    • Orion rail spur was damaged but we expect such repairs to be concluded by noon today [Monday].
    • Bulk trucks shipments will resume today [Monday].
    • We expect rail shipments out of the plant to resume this afternoon [Monday].
    • There was a rumor that our plant was flooded. That is incorrect. The area did flood but our flood barrier prevented our plant from flooding.
  2. Orange, TX
    • Plant has full access.
    • Plant is manned and ready to start up.
    • However, power has not been restored. Last night, our power supplier provided an update with a much longer time to restore power given the extensive damage due to the Hurricane in the area. Current estimates put power being restored at the beginning of the week of September 7th. This may still change (earlier or later).
    • We have rented generators to allow access and loading of bulk trucks and railcars.
    • Given this extended delay in power being restored we will be revising the inventory and supply situation and communicating with you.

Overall, these reports, along with previous reports from other suppliers, indicate that long-term damage to carbon black plants in the region from the hurricane was negligible. Some short-term shortages are likely due to power outages and shipping disruptions.

August 30, 2020

Partial update on hurricane aftermath

Filed under: Carbon Black, General — Notch @ 10:34 pm

As of Sunday night, Hurricane Laura had been downgraded to a Tropical Depression and was moving along the coast of Nova Scotia toward Newfoundland. The storm made landfall at 1:00 AM on August 27th at Cameron, Louisiana as a strong Category 4 Hurricane with winds as high as 150 MPH and a powerful storm surge. The storm caused extensive damage and the loss of power for hundreds of thousands of homes and businesses. However, initial reports from carbon black producers in the area indicate that flood damage was minimal as the area was better prepared and the dikes held.

Cabot Corporation put out this statement to customers on Friday, August 28th:

In the aftermath of Hurricane Laura, we are happy to report that all our employees are safe and unharmed. Our manufacturing facilities in both Franklin, LA (Canal) and Ville Platte, LA sustained only minor wind and rain damage. Our employees will begin returning to both sites today and focus on clean up and restarting operations. We expect to return to normal operations by the weekend and shipments on Monday. Our thoughts remain with those in our communities that were greatly impacted by the storm.

Tokai Carbon CB reported that its plant in Addis, Louisiana never lost power and was able to restart on Friday, August 28th at full capacity.  

 

August 27, 2020

Orion statement on hurricane status

Filed under: Carbon Black, General — Notch @ 9:12 am

On Monday, August 24, Orion Engineered Carbons issued the following statement to customers regarding preparations for the storms expected this week.

Orion Engineered Carbons Monday, August 24, 2020 Update to Customers Regarding Hurricanes Laura and Marco

In light of 2 tropical systems forecasted to arrive in the Southern LA area starting on Monday, August 24th, Orion’s Ivanhoe, Louisiana facility was safely taken down over this past weekend and the storm gate was installed on Sunday, August 23rd. Tropical system Marco will be impacting the Ivanhoe area over the next 24 – 48 hours.  Tropical system Laura’s current uncertainty of landfall and intensity will very likely require this plant to stay down and closed until after Laura has cleared the Gulf Coast. 

Orion’s Orange, Texas facility is being taking down on Monday, August 24th, afternoon and will close its access gates shortly thereafter. This plant will also very likely stay down until Laura has cleared the Gulf Coast.

Restart dates will be determined upon evaluation of the sites, most likely to be performed after Thursday, August 27th. The timing of this evaluation will vary depending on where Laura makes landfall, access to the site and supply sources such as electrical power.

Please also note that we expect rail delays on any railcars shipped late last week that are on an easterly route as the railroads have now closed flood gates both in the Baton Rouge and New Orleans areas.  The resumption of rail movement will not occur until after both storms have cleared the area and track/bridge damage assessment has been completed and any actual damages repaired.

For further information about your specific order(s), please contact your Orion Customer Service Representative and/or Sales Representative.

We will provide periodical updates as the situation develops over the course of this week.

August 26, 2020

Recovered Carbon Black Congress coming in September

Due to ongoing concerns about COVID-19, this year’s Recovered Carbon Black Congress will be an entirely virtual event. The conference will take place over two 4-hour conference days on 9 & 10 September, commencing at 13:00 BST / 14:00 CEST / 08:00 EDT and will be streamed live via an all-in-one online event platform. Delegates will have the opportunity to gain perspective from key experts in the industry, schedule 1-1 meetings with fellow delegates, engage in real-time discussions, get answers to questions, and access recorded presentations. Notch will be presenting on Day One. 

Here is the conference agenda.

Hurricane Laura will hit US carbon black industry hard

Filed under: Carbon Black — Notch @ 11:57 am

Hurricane Laura is expected to strengthen into a Category 4 storm and make landfall tonight or Thursday morning near the border of Louisiana and Texas. 

From the National Hurricane Center’s Twitter:

Unsurvivable storm surge with large and destructive waves will cause catastrophic damage from Sea Rim State Park, Texas, to Intracoastal City, Louisiana, including Calcasieu and Sabine Lakes. This surge could penetrate up to 30 miles inland from the immediate coastline.

The National Hurricane Center expects the storm to move through Louisiana into Arkansas by Thursday night, before veering east toward West Virginia and Virginia by early Saturday.

With so much of US carbon black capacity located on the Gulf Coast, the storm will hit the industry hard.

Heavily affected with possible flooding:

  • Birla Carbon USA – Franklin, LA
  • Cabot – Franklin, LA
  • Orion Engineered Carbons – Ivanhoe, LA
  • Orion Engineered Carbons – Orange, TX
  • Together these four plants represent about 30% of US carbon black capacity

Moderately to heavily affected (depending on storm path and severity):

  • Cabot – Ville Platte, LA
  • Tokai Carbon CB – Addis, LA
  • Together these two plants represent about 20% of US carbon black capacity

 

 

August 24, 2020

Bridgestone to close tire plant in South Africa

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Notch @ 9:41 pm

Last week, Bridgestone announced a plan to close its bias tire manufacturing plant in Port Elizabeth, South Africa. The closure is in line with the company’s recently announced strategy to focus on premium profitable growth segments of its business. Bridgestone Southern Africa (BSAF) has initiated a Section 189 notice and a consultative process in compliance with the South African Labour Relations Act.

Bridgestone said that the Port Elizabeth plant, which is 84 years old, is specifically geared towards the production of older bias tires, which are globally in decline and being phased out in South Africa as it is an unprofitable market. The effects of a shrinking economy and an influx of cheap imports compounded by rapid changes in the tire industry has prompted BSAF to restructure its operations. The agricultural industry is shifting to radial tires, which are longer lasting, and the production of which is modern and high-speed. Converting the plant to produce radial tires would require a substantial investment that is not feasible in the current economy. The move will affect 252 employees. A second Bridgestone factory in Brits, South Africa, will remain in operation.

August 20, 2020

Phillips Carbon Black Limited successfully embeds technology

Filed under: Carbon Black, General — Notch @ 11:01 pm

With a market presence in 35+ nations, Phillips Carbon Black Limited is India’s largest carbon black producer, with manufacturing units in Durgapur (Eastern India), Kochi (Southern India) and Palej and Mundra (Western India.) Phillips manufactures and supplies carbon black found in eyeliners, laserjet printers, Iphones and even BMW cars. During the pandemic, Phillips faced challenges maintaining operational efficiency, however the company successfully addressed these challenges with the support of technology.

“With our vendor support by IBM, we have embarked on a long term journey with successful projects such as cloud migration, SAP S/4 HANA deployment, remote monitoring setup and counting more. Amid the initial stage of lockdown pan India, we were able to address overnight hardware and software requests of our employees. Our partnership together has strengthened the business with many technology driven benefits…”

Dipan Sengupta, Head- IT, Philips Carbon Black Ltd

To protect users during remote work from home, Phillips invested in a layered security approach to ensure there were no intrusions or threats, and maintained 100% availability of the infrastructure, even safely conducting annual board meetings and audit committee meetings online.

We are a listed company and recently all our major transactional decisions were made online, which were supported by the core IT setup. As we were fully equipped with IT support and availability of applications which are secured, our workflow became seamless. All of this was possible because of our early investments in right technology and infrastructure”

Dipan Sengupta, Head- IT, Philips Carbon Black Ltd

Technology also plays a role in helping manufacturing plants operate efficiently with a system that helps monitor any abnormalities of process. With the collaboration of internal IT and IBM teams, the plants were fully operational, and the company maintained sanitation, thermal testing and social distancing regulations. Phillips has embedded technology at every functional process, resulting in growth and operational efficiency during the pandemic.

August 12, 2020

Notch updates Carbon Black World Data Book

Filed under: Carbon Black — Notch @ 8:56 am

Notch Consulting has published a new annual edition of the Carbon Black World Data Book, the most widely read and referenced report on this $16 billion industry. The report provides extensive proprietary data on carbon black capacity, capacity utilization, production, trade, markets, and pricing. The subscription package includes the annual report (with Excel spreadsheet), quarterly supply and demand updates (October 2020, January 2021, April 2021), monthly pricing, and special topic reports. The new report includes a special report on the effect of COVID-19 on tire, rubber, and carbon black markets. Here is an overview. For more information or samples, contact Notch.

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