Views on the trend of the global carbon black market in the second half of the year

  　According to a report in the European Rubber Journal on August 25, 2023, there are mixed views on the direction of the global carbon black market in the coming months. There have been some mixed signals in recent weeks for the carbon black industry, particularly with regard to pricing and the future supply-demand balance. First-half results from all three major carbon black suppliers have highlighted the same theme of rising earnings and profits despite flat or lower year-on-year sales.

　　The operating performance of Donghai Carbon Co., Ltd. in the first half of the year is in line with this trend. While sales of carbon black for rubber were flat compared to last year, sales rose 15% year-on-year and operating profit more than doubled. Donghai Carbon Company pointed out that this is due to the increase in production efficiency and the pass-through of environmental investment costs, especially in the North American market, which helped push up sales and operating profits.

　　Similarly, Cabot Corp.'s Reinforcement Materials division reported a 17% rise in profit despite a 14.5% drop in revenue and an 8% drop in volume in its fiscal third quarter. Cabot believes that this is mainly due to the decline in sales of rubber carbon black due to the sluggish replacement tire market. The sales volume in Europe, the Middle East and Africa fell most significantly, reaching 12%, followed by the Americas, which fell by 10%, and Asia, which fell by 5%. %.

　　Orion Engineering Carbons also continued this trend, and its carbon black business for rubber saw a significant year-on-year increase in profits, mainly due to higher contract prices. However, Orion's rubber carbon black sales fell 14% in the three months to June 30, with volumes down more than 9% year-on-year. The company's earnings report noted that the decline in sales was mainly due to "destocking and destocking" by customers in Europe, the Middle East and Africa, and the Americas.

　　Despite the seemingly weak market demand outlook, at least these three major carbon black suppliers still hold positive earnings and pricing prospects for the rest of the year. Cabot Corp. is one of them, predicting higher contract prices for carbon black through 2024 as market fundamentals remain "unchanged" in Europe and the US. "We have a certain percentage of customers who have signed multi-year contracts because they realize that prices are going to go up next year," Cabot President and CEO Sean Keohane told market analysts. "These rounds of price increases, which will form the basis for the price of our remaining contracts through 2024, should reflect the actual level of price increases," Kirshann added on the August 5 financial report call. However, there is also an uncertainty Factors such as the possible EU restrictions on carbon black exports from Russia in June 2024 could have an impact on the market. In this regard, Cabot leader Keshanen commented: "For customers, the reliability of supply is very important, and I think it is critical to obtain supply."

　　However, some people have different views on the trend of the carbon black market in the next few months. In the anonymous feedback provided by the European Rubber Journal, someone said: "The global market is declining and will not recover in 2024. Therefore, let us remain vigilant and do not have unnecessary panic about the supply situation." Another view is that "all major distributors of carbon black in Russia have warehouses in Europe filled with stocks that can meet demand in 2024 and 2025." Others believe that , "the supply of carbon black from external sources is sufficient to meet the demand of the European market", especially because overseas producers are expanding their production capacity, and global freight rates are currently lower, making carbon black imports more attractive.