The Marangoni Group has acquired a majority shareholding, 51 per cent, in the South African tread maker Leader Rubber Company SA (Pty) Ltd. The move is the latest development in the decade-long partnership between Leader Rubber and Marangoni. The Italian company acquired a 25 per cent share in the company in 2015 , a move it described as the “culmination of a partnership that has been ongoing for several years.”
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.
The Board of Management of specialty chemicals company LANXESS decided to make use of the authorization granted by the stockholders’ meeting on May 20, 2016 and to acquire own shares of up to EUR 200 million (excluding incidental costs) via the stock exchange. On the basis of the current share price (status: January 9, 2019), this would amount to around 4.9% of the share capital and would correspond to a number of approximately 4.5 million own shares, LANXESS says in a Press release.
TOKYO – Sumitomo Rubber Industries says it has cracked the mystery surrounding rubber failure, in a joint study with the Dresden, Germany-based Leibniz Institute for Polymer Research.
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.
Kuala Lumpur – Global demand for natural rubber (NR) rose 5.2% year-on-year to 11.7 million tonnes for the first 10 months of 2018, according to the Association of Natural Rubber Producing Countries (ANRPC).
NR Production charted a 5.5% growth to 11.5 million tonnes during the same period, leading to a shortfall of 228,000 tonnes, said Nguyen Ngoc Bich, secretary-general of the ANRPC on 24 Dec 2018.
The Natural Rubber Trends and Statistics report by the Association of Natural Rubber Producing Countries (ANRPC) in October 2018 has stated that the world production of natural rubber (NR) from January 2018 to October 2018 amounted to 11.468 million tonnes, an increase of 5.5% from the same period in a year earlier. The livelihood of rubber farmers was affected by the prevailing low rubber prices and unfavourable climate condition in member countries.
AKRON — Smithers Rapra will run a free four-part series on rubber compounding led by Christine Domer, general manager of Smithers’ analytical and physical testing labs.
The International Rubber Study Group (IRSG) is organising a “Women for Rubber” photo competition to pay tribute to women’s contribution in the rubber industry as part of IRSG’s 75th Anniversary celebrations. This contest is supported by Singapore Committee for UN Women and prizes are sponsored by Namazie International, IRSG says in a Press release.