News from Notch Consulting, Inc.

May 7, 2020

Orion announces Q1 results, sales down 12.7% YOY

Filed under: Carbon Black, General — Notch @ 9:17 pm

On Thursday, Orion Engineered Carbons released their results for Q1 2020, reporting a 12.7% drop in sales and a 10.5% decline in volumes relative to Q1 2019. Declines were sharpest in Rubber Carbon Blacks, which showed a 14.6% decline in sales and an 11.1% decline in volumes. Specialty Carbon Black saw a decline of 9% in sales and 8.8% in volumes during the quarter. Specialty black demand was down mainly due to “weakening demand in the North America and Western Europe regions predominantly in the automotive and pipe markets.” Rubber black demand was down due to a “sharp decline in sales volumes beginning in mid-March as tire and auto manufacturing plants closed due to COVID-19.” Orion also attributed lower Rubber Black volumes to a “strategy as part of 2019 contract negotiations to emphasize raising price closer to reinvestment levels over volume.”

A few key takeaways from the earnings announcement:

  • OEC reported that all of its plants continued to operate during the quarter but the company implemented a flexible production schedule whereby reactors are run for a few weeks to restock inventories, then shut down.
  • OEC plants were at about mid-40s percent utilization in April.
  • More than 75 percent of tire plants served by OEC were fully or partially idled in April.
  • OEC expects tire manufacturing plant restarts to occur slowly.
  • In contrast to the tire market, only a few specialty customers were idled.

OEC will hold its earnings call on Friday, May 8 at 8:30 a.m. (EST).

May 5, 2020

Tire production resumes at Toyo plant in Georgia

Filed under: Coronavirus/COVID-19, General, Tires — Notch @ 11:05 pm

On May 3, Toyo Tire Holdings of Americas Inc. will reopen its White, Georgia tire plant, ramping up gradually on a revised shift schedule.  The plant has been idled since March 30 due to the COVID-19 pandemic.

Toyo is implementing additional health and safety measures based on CDC guidelines.

Enviro completes share issue to Michelin

Filed under: General, Rubber, Tire Recycling, Tires — Notch @ 10:54 pm

Scandinavian Enviro Systems AV (Enviro) has strengthened its financial position by completing a directed share issue to Michelin.  The investment was part of a long-term strategic partnership that provides Enviro with significantly improved conditions for the global establishment of recycling plants.  A final agreement is expected to be completed by mid-2020.

April 28, 2020

LG Chem announces expansion of Carbon Nanotube Production

Filed under: Carbon Black, General — Notch @ 12:45 pm

On April 27, LG Chem announced that it will expand carbon nanotube (CNT) production at its plant in Yeosu.  LG Chem will be expanding by 1,200 tons, increasing total production capacity to 1,700 tons.

CNT is a new material with superior properties used in batteries, semi-conductors, auto parts and aircraft fuselages.

The expansion is designed to target the rapidly growing global EV and CNT markets and accelerate LG Chem’s product structure advancement strategies.

Partial production resumes at one Apollo plant in India

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 12:43 pm

Apollo Tyres Ltd. has resumed partial production at its factory in Perambra, India after government directives exempted its operations from lockdowns, according to a stock exchange filing.

The tire maker idled production at other Indian facilities in Kalamassery, Limda, Gujarat and Chennaiother amid concerns over the COVID-19 outbreak, and will provide updates on the restart of production in these facilities as decisions are made.

April 17, 2020

European tire sales for Q1 show effects of COVID-19

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 9:50 am

On April 16, ETRMA (European Tyre and Rubber Manufacturers’ Association) released its figures for tire sales for the first quarter of 2020. Comparing the first quarter of 2020 to Q1 2019, there were 13% declines in sales of both passenger car and agricultural tires and a 6% decline in sales of truck tires. The impact is most apparent in the March data, when most of the shut-downs were instituted: comparing March 2020 to March 2019, there was a 26% decline in passenger car tires and 15% declines in both truck and agricultural tires. ETRMA estimated that 89% of Europe’s manufacturing capacity was closed as of April 7.

The drastic decline in tyre sales and replacements is partly due to the extensive measures taken by tyre manufacturers to protect the health and well-being of their employees and comply with government guidelines. This has led to the temporary closure of the European manufacturing facilities of almost all member companies. As of 7 April, ETRMA estimates that in Europe: 89% of manufacturing capacity is closed, 84% of the workforce is affected and 10% of R&D staff is unable to continue their activities. It is unclear when the European tyre industry will be able to resume its production activities and the international supply chain will be up and running again.

Additionally, there has been a substantial drop in demand due to the national lockdown measures across the European Union, which have affected vehicle and tyre purchases, driving behaviour and the number of miles driven. Fazilet Cinaralp, Secretary-General of ETRMA states that: “Both the suspension of the operational activities and the sharp drop in demand will have a long-lasting impact on the performance of our industry. This is the biggest challenge our industry has ever faced.”

 

April 16, 2020

Conti restarts some tire and MRG production in Romania

Filed under: Carbon Black, Coronavirus/COVID-19, General, Rubber, Tires, Uncategorized — Notch @ 10:07 pm

Continental A.G. restarted its tire plant in Timisoara, Romania on April 7, a company spokesperson announced. The plant was idled on March 25. Another plant in the same town producing belt and air conditioner lines was restarted on April 10; the plant had been idled March 30. ContiTech hose plants in Nadab and Carei, Romania remain idled, and most of the company’s administrative and R&D staff continue to work from home.

Scandinavian Enviro Systems announces strategic partnership with Michelin for rCB

Filed under: Carbon Black, General, Recovered Carbon Black, Tires — Notch @ 9:38 pm

Scandinavian Enviro Systems (Gothenburg, Sweden) has announced a new long-term strategic partnership with Michelin under which Michelin will acquire a 20% stake in Enviro, valued at SEK 32.5 million (US$3.2 million). The agreement also includes a project to build a tire recycling facility based on Enviro’s pyrolysis technology, as well as a joint supply agreement for recovered carbon black between the two companies. The location of the plant will be confirmed at a later date. The stock placement is expected to be completed by April 29, 2020, while the final agreement on the strategic partnership is expected to be signed by mid-2020. The current letter of intent contains no provisions that prevent Enviro from collaborating with other tire manufacturers or tire suppliers after July 31, 2020, according to Enviro’s press release.

April 15, 2020

Cooper restarts Mexico tire plant

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 9:43 pm

Tire Business (subscription required) reports that Cooper Tire & Rubber planned to restart its plant in El Salto, Mexico on April 13. Cooper’s tire plants in the US will remain closed through at least April 24. The plants in both Mexico and the US were idled on March 21. Cooper’s plants in Europe also are idle, but plants in China have reopened. Cooper said it is taking necessary steps to ensure worker safety at the El Salto factory, including social distancing, additional cleaning and disinfecting of equipment and facilities, and restricting visitor access.

Bridgestone Russia, Spain tire plants to reopen

Filed under: Coronavirus/COVID-19, General, Tires — Notch @ 10:51 am

Bridgestone facilities in Burgos, Bilbao and Puente San Miguel, Spain and Ulyanovsk, Russia have resumed full production after being idled on March 23 by the COVID-19 pandemic, according to Rubber News (subscription required.)

Bridgestone factories in Bari, Italy and Lanklaar Belgium are scheduled to restart later this month.  Plants in Poznan and Stargard, Poland and Tatabanya, Hungary are running at reduced capacity.  Factories in India, South Africa and France will remain closed for now.

After suspending operations on March 21, Bridgestone Americas Inc. and North American Firestone Industrial Products and Firestone Building Products factories restarted operation on April 13.

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