Late last week, Orion Engineered Carbons announced two actions regarding their business in Korea. In the first, Orion will convert a tire grade carbon black line at its plant in Yeosu to produce specialty and technical grades instead of tire grades. The action will impact 20,000 tons of carbon black. The conversion project will being in 4Q 2016 and is expected to be completed by July 2017.
“This line conversion in Yeosu is among the next steps in Orion Engineered Carbons’ ongoing transition to higher value added products for specialty and technically demanding rubber applications,” said Jack Clem, Orion’s Chief Executive Officer. “This project, along with our previously announced plans to expand the specialty and technical grade mix at our Qingdao, China plant, will continue our penetration of the rapidly growing North and Southeast Asian markets, as well as providing support for demand from the rest of the world.”
Secondly, Orion announced that it will implement a base price increase of up to 9% on all Rubber Black grades produced in South Korea and sold in the Asia/Pacific market. The increase will begin on December 1, 2016. Orion cites tightening environmental laws and regulations, which the company says are adding substantial amounts to its operating cost base, as are annual increases in labor costs. These conditions are being exacerbated by unfavorable developments in the feedstock market; over the last months Orion reports that it has had to pay significantly more for high quality carbon black oil due to a very tight Korean fuel oil market. The price increases have occurred independently from the underlying movements of the Singapore fuel oil index, which is used as the reference for price adjustments related to oil price changes that Orion negotiates with its Korean customers on a regular basis.
This discrepancy mirrors similar recent issues in both Europe and the United States wherein actual feedstock costs have differed significantly from the index grades used to calculate feedstock costs for pass-through.
Here are the press releases:
This week Cancarb Limited announced the appointment of Kangshin Industrial Co., Ltd. as Cancarb’s authorized distributor for Thermax thermal black in South Korea as of January 1, 2017. Cancarb is the world’s leading producer of thermal black and is a subsidiary of Tokai Carbon.
Here is the press release.
According to the Lincoln Journal Star, Monolith Materials has announced plans to establish a manufacturing headquarters in Lincoln, Nebraska. Monolith is a California-based startup that plans to build a new $50M carbon black plant in Hallam, NE in cooperation with Nebraska Public Power. The new plant will produce carbon black from natural gas and provide by-product hydrogen as fuel for a converted coal-based burner at the site. Phase 1 of the plant recently broke ground and startup is expected by mid 2018.
In the original plan, only the plant would be located in Nebraska, but Monolith recently announced plans to establish a manufacturing headquarter in downtown Lincoln by November 1. The company plans to hire 50 people for the first phase, adding another 50-100 employees for the second phase of the project.
Rubber & Plastics News has details on Goodyear’s recently detailed plans to expand its capacity for high-value added tires around the world. The program is budgeted at nearly $800 million through 2019 and involves projects at plants in the US, Mexico, South Africa, China, and India.
There have been several significant tire plant capacity expansions announced over the last few weeks, as well as one plant closure. Here are details and links for more info.
Bridgestone has completed its new in Ulyanovsk Oblast, Russia and expects to start the plant by year-end 2016, with ramp-up through 2018 to 12K units/day of winter passenger car tires. (Tire Business)
Goodyear is considering investing in Topeka, Kansas. (Rubber & Plastics News)
Sumitomo is investing $87M to double capacity for car and light truck tires to 10K u/d at Tonawanda, NY. (Rubber & Plastics News)
Qingdao Sentury will spend $530M to build a new PC/LT tire plant in Lagrange, Georgia. Another huge new project for the growing US tire industry. (Modern Tire Dealer)
Goodyear is adding capacity for aircraft tires at its car and truck tire plant in Bangkok, Thailand in a project valued at $162M. (Rubber & Plastics News)
Finally, Sameer Africa Ltd., which is the former Firestone East Africa Ltd., will shut down its 47-year-old factory in Nairobi, Kenya and will outsource production to China and India. This was Kenya’s only tire plant, producing car, light truck, truck/bus, agricultural, and off-road tires. (Rubber & Plastics News)
Cancarb Limited today announced the appointment of R.D. Abbott Company, Inc. (Cerritos, CA) as Cancarb’s agent for Thermax brand thermal black to the rubber industry in the US and Canada, effective January 1, 2017.
Cancarb Limited, a subsidiary of Tokai Carbon, is the world’s leading producer of medium thermal black. R.D. Abbott is a US-based supplier to the rubber industry.
Here is the press release.
The Investor reports that OCI has completed its joint venture carbon black plant in Shandong, China, which will operate as OCI Jianyang Carbon Black Company. OCI’s partner in the venture is Zaozhuang Mining Group (Shandong Energy). The new factory has 80,000 tons of annual capacity.
The US Department of Commerce today made an affirmative preliminary determination in the antidumping duty investigation for truck and bus tires imported from China. The Commerce Department issued a fact sheet on August 29 that proposed a 20.87% preliminary dumping rate against one of the two of the mandatory respondents in the investigation, Prinx Chengshan (Shandong) Tire Co. Ltd. The other mandatory respondent, Double Coin Holdings Ltd., is not eligible for a separate rate and so is included in the China-wide entity dumping rate of 22.57%. No other Chinese tire producers or exporters responded to the Commerce Department’s requests for information and so will be subject to the 22.57% preliminary dumping rate.
Commerce began its investigation into Chinese imports of truck and bus tires on February 19, 2016, responding to petitions filed by the United Steelworkers with the International Trade Commission. The petitions sought antidumping and countervailing duties against the Chinese imports. On June 28, Commerce issued a notice that it had found preliminary affirmative evidence of government subsidies, issuing preliminary countervailing duties. Commerce’s final decision in the investigation is due on January 17, 2017.
Notch Consulting is proud to announce the publication of the 2016 edition of the Carbon Black World Data Book, the most widely read and authoritative report on the $13 billion global carbon black industry. Published annually and updated quarterly, this 352-page report provides extensive proprietary data on carbon black supply and demand. The report provides global trends as well as detailed coverage for 26 leading countries. Historical data are provided for all years from 2005 through 2015, with forecasts for all years through 2020, as well as 2025. Data provided for each country and region include carbon black capacity by company and plant, capacity utilization, production, imports, exports, demand, markets (passenger car tires, truck/bus tires, other tires, non-tire rubber, and specialty blacks), grades (tread, carcass, and other), as well as market value and average pricing.
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Sumitomo Rubber Industries will double capacity for passenger car and light truck tires in Tonawanda, New York by the end of 2019. The project is budgeted at $87 million and will take capacity to 10,000 tires per day.