According to foreign media reports, the industry's views on how the global carbon black market will change in the fourth quarter of this year are quite different.
In recent weeks, industry players have sent some mixed signals about the carbon black industry, particularly regarding pricing and the future balance between supply and demand.
The first-half performance reports released by the three major carbon black suppliers have repeatedly shown the same theme, which is that although sales are flat or reduced compared with the same period last year, revenue and profits are still growing.
Tokai Carbon's operating performance in the first half of the year is typical of this trend. Although the sales volume of rubber carbon black in its carbon black business unit was the same as the previous year, sales increased by 15% year-on-year and operating profits more than doubled. . Tokai Tanso noted that productivity improvements and the passing on of environmental investment costs, especially in North America, helped push sales and operating profits higher. Likewise, Cabot Corp.'s Reinforcement Materials unit reported a 17% profit increase despite a 14.5% revenue decline and an 8% volume decline in its fiscal third quarter, the calendar second quarter.
Cabot believes that this is mainly due to the decline in rubber carbon black sales due to the weak replacement tire market; Europe, the Middle East and Africa saw the largest year-on-year sales decline of 12%, followed by the Americas, which fell by 10%, and Asia decreased by 10%. 5%. Orion Engineering Carbon Co., Ltd. also continued this model. The profits of its rubber carbon black business increased significantly year-on-year, mainly due to the increase in contract prices.
However, Orion's rubber carbon black sales fell by 14% in the three months ended June 30, while sales fell by more than 9% year-on-year. The company's performance report noted that the sales decline was mainly due to "destocking and destocking delays" by customers in the Europe, Middle East and Africa region and the Americas.
Although the outlook for market demand still appears weak, at least the three major carbon black suppliers remain optimistic about their earnings and pricing prospects for the remainder of this year.
Among them, Cabot is one of the companies that holds this optimistic attitude. The company expects that carbon black contract pricing will increase in 2024 when market fundamentals in Europe and the United States remain "unchanged." Cabot President and CEO Sean Keohane told market analysts: "We have a certain percentage of customers who have signed multi-year business contracts because they sense that prices will increase the next year." Keshanen added in the financial report conference call held on August 5: "These price increases are the pricing basis for our remaining contracts in 2024 and should reflect the actual level of price increases." Among them, one factor is The uncertainty is the impact that the European Union may have on the market by restricting Russian exports of carbon black to Europe in June 2024.
In this regard, Cabot leader Keshanen commented: "For customers, supply status is of course very important, I think obtaining the reliability of supply is crucial to them." However, the negotiation table Some people on the other side have put forward different views on the market trend of the carbon black market in the next few months.
Among the many messages provided by the European Rubber Journal anonymously, one person commented: “Global markets are falling and will not recover in 2024. So, let us remain vigilant and not create unnecessary panic about supply conditions. As for the possible impact of the new sanctions imposed by the EU on Russia, another view is that "all major dealers of Russian carbon black have warehouses full of stocks in Europe to meet the needs of 2024 and 2025." Demand." Others believe that "carbon black supply from outside is sufficient to meet European market demand," especially since overseas manufacturers are now expanding production capacity, and "the current global shipping costs are low, and carbon black imports are very important. is attractive".