Rubber prices experienced a surge in the period from 2009 to 2011, during which the increase was as high as 240%, which in turn led to a large expansion of the planting area in the producing countries, resulting in a serious oversupply. Although the international rubber futures price has risen by 16% this year, it […]
JAKARTA: Thailand, the world’s top natural rubber producer, will delay the start of planned curbs on exports of the commodity by over a month due to the general election in the country, officials from two other nations that are also making cuts said on Monday. Thailand, Indonesia and Malaysia, which together form the Tripartite Rubber […]
Demand-supply gap rises to 45% during first 10 months this fiscal The tyre industry has voiced its concern over the decline in production of natural rubber in the country, as it led to a widening gap between domestic demand and supply. The Automotive Tyre Manufacturers Association (ATMA) said that natural rubber consumption has grown by […]
Singapore — China’s plan to cut the rate of value added tax this year has been generally welcomed by commodity markets, as the lower cost burden would help businesses and stimulate sales at a time of slower economic growth. Prime Minister Li Keqiang announced early Tuesday during an annual meeting of parliament that the government…
The world’s top producers of natural rubber said in a joint statement on Friday they will curb exports by up to 300,000 tonnes in a bid to prop up global prices for the commodity. The curb, formally known as the Agreed Export Tonnage Scheme (AETS), was announced following a meeting on Friday of the International …
Increasing carbon black capacity an industry priority, latest Smithers Rapra research shows
According to The Future of Carbon Black to 2023, a new market report from Smithers Rapra, increasing carbon black production capacity is an industry priority for the five years to 2023. More than 70% of all carbon black produced is used in the production of tires, and demand for the fossil fuel-based rubber reinforcing agent continues to grow in relation to increasing global vehicle and tire demand. Industrial and middle class growth in emerging markets is driving the need for greater carbon black supply.
Data from the new Smithers Rapra market report estimates global carbon black demand at around 12.03 million tons in 2013. The market will increase to a projected total of 14.55 million tons in 2018. Across the same time period the projected value in the market has risen from $18.1 billion to $19.9 billion.
Global demand for carbon black is forecast to increase to reach almost 18 million tons in 2023, an average year-on-year increase of 4.3%, Smithers Rapra data shows. Total value will increase significantly faster and the market will be worth $30.4 billion. The market is driven primarily by continued large investments in capacity for passenger vehicle tires and light truck tires, and a stable replacement market. Carbon black has a stable growth profile, with a compound annual growth rate (by volume) of around 3.9% during 2013–18.
Several key trends are driving the increased demand for carbon black globally.
Changes in the tire market
Because the tire industry consumed 73.5% of the global volumes of carbon black in 2017, changes in the tire manufacturing industry are putting new pressures on carbon black producers. In the US, capacity utilization in all sectors of tire production is in the 70%–80% range, but tire size and structure are changing. Tires are getting wider with smaller sidewalls, which creates more demand for tread blacks, and less demand for carcass carbon blacks. The most popular rim size has increased from 14-16 inches and reached 18 inches in 2018.
There is a trend toward merger and acquisition (M&A) activities in the carbon black industry worldwide. The growing consolidation within the carbon black industry is inevitable to meet market demand for quality products at competitive pricing. This benefits larger suppliers.
The top three carbon black producers are Cabot, Aditya Birla and Orion Engineered Carbons. In
2017 these three companies produced around 39.2% of global supply. To meet growing demand, Cabot has strengthened its position with multiple expansion projects, while Aditya Birla has doubled its capacity by acquiring Columbian Chemical’s assets. The India-based firm is now present in 12 countries with 17 manufacturing facilities.
For Chinese producers the emphasis is more on increasing operating rates and realizing higher pricing and profit margins. However, still more new carbon black production capacity is required to meet the growing demand during 2018–23.
Environmental issues and government regulations
Environmental issues and national government regulations are playing an important role in the M&A activity, shifting production sites around the world; as does a renewed focus on lean manufacturing. In the US, for example, the five major domestic carbon black makers have signed consent agreements with the Environmental Protection Agency (EPA) – three of them in 2017 – to reduce toxic emissions from their plants. The expense of complying with these environmental consent agreements will hamper investment in production capacity to the end of the current decade.
Shifting trade patterns
The international market in carbon black trading across 2013–23 will experience change. Most significantly, since 2015 North America has become a net importer, due to an increase in demand for carbon black based on reinvigorated domestic tire production. Since 2015 the Middle East has switched from net imports to exports. New production facilities in Saudi Arabia and the United Arab Emirates have created a surplus of carbon black for exporting within the Middle East, and beyond its borders to Africa and Western Europe.
China was the leading global exporter of the commodity, and this is expected to continue during 2018–23. Thailand and Indonesia are its main trade partners, followed by India, Japan, Korea and Vietnam. Recently, China has started to export more carbon black to the US, Western Europe, Poland and Turkey. This has led to protectionist measures – anti-dumping measures in some countries – most recently in India and the US.
For more information about Smithers Rapra’s The Future of Carbon Black to 2023 market report, visit: https://www.smithersrapra.com/market-reports/tire-industry-market-reports/the-future-of-carbon-black-to-2023.
JAKARTA (Jan 16): A technical team at the International Tripartite Rubber Council has proposed cutting shipments of natural rubber by 300,000 tons this year as part of efforts to improve prices, says Oke Nurwan, director general of foreign trade at Indonesia’s Trade Ministry.
TOKYO (Jan 22): Benchmark Tokyo rubber futures plunged nearly 4% on Tuesday, sliding from a nearly 8-month high hit the previous day, amid pessimism about global growth and signs of economic slowdown in China, the world’s top rubber buyer. The International Monetary Fund (IMF) trimmed its global growth forecasts on Monday and a survey showed […]
What happened Shares of Goodyear Tire & Rubber ( NASDAQ:GT ) slid nearly 37% last year, according to data from S&P Global Market Intelligence . The business couldn’t shake investor concerns over higher crude oil and steel prices, which led to a significant increase in raw-material costs and eroded profit margins, or the ongoing trade war between the United States and China, which threatened to result in tariffs capable of slowing the business.
Bangkok – Members of the International Rubber Tripartite Council (IRTC) – Thailand, Indonesia and Malaysia – are set to meet in Bangkok later this month to address issues around prolonged low prices for natural rubber (NR).
Speaking 7 Jan to ERJ, a spokeswoman for the International Rubber Consortium (IRCo) said the exact date of meeting is not finalised yet.
The meeting, she said, would review measures to benefit smallholders, but did not elaborate further.