Product profile: Carbon black

22 December 2003 00:00  [Source: ICB]

Growing imports have hit European producers hard and capacity has shut. The pressure remains and more closures could happen as imports look set to continue increasing

Uses

Carbon black is used as a reinforcing, pigmenting, UV stabilising or conductive agent, mainly in rubber applications. Its main consumer is the tyre industry. Global tyre applications account for about 67% of consumption. Non-tyre rubber applications (such as car hoses, belts and gaskets) account for about 25% of demand, while the remainder is consumed in speciality blacks used in paints and coatings, printing inks and toners, and plastics.

Supply/demand

World markets continued to improve in 2003 after a dip in 2001. Demand is recovering and global production is tipped to grow by 3.1% to reach 7.8m tonne this year, with utilisation rates exceeding 87%. Demand is benefiting from the continued popularity of sports utility vehicles, which take larger tyres, as well as from off-road and performance tyres, which wear out faster. However, the non-tyre rubber sector has been weak in recent years.

Output in the European Union, which dropped 4% in 2002, is expected to be flat this year because of rising import volumes, particularly from Russia, Egypt and the Ukraine after the EU rejected anti-dumping measures in March 2003. Imports are likely to continue growing keeping producers under price pressure. Demand in the EU will rise by about 8% overall from 2002-05, but domestic production will only increase overall by 1%, with higher imports making up the difference.

Some industry rationalisation has taken place and more is expected. Degussa closed 40 000 tonne/year of capacity in France last year. This year has seen Cabot shut its Spanish plant and Degussa close two lines at Kalscheuren, Germany, lowering capacity by 35 000 tonne/year.

Pricing

Prices have risen by about 30% this year after increases were achieved in quarter four 2002 and quarter one 2003. This is an improvement on 2002 when prices stayed flat after average gains of 2% and 5% in 2001 and 2000, respectively. Margins remain under pressure from high feedstock costs, although they have improved since 2001. Several producers are being investigated in Europe, Canada and the US for price fixing.

Technology

Carbon black is derived from the incomplete combustion of natural gas or petroleum oil, primarily residual heavy fuel oil from petroleum refining, coal tar distillation and ethylene production. It is typically produced by the partial oxidation of hydrocarbon liquids or gases at temperatures above 2000ºF.

Based upon variations in particle size, structure and purity, and the method of production, carbon black can be classified as furnace black, lampblack, bone black, channel black, acetylene and thermal black. Furnace blacks dominate at about 90% of global output with thermal blacks making up the remainder. Lampblack, bone black and acetylene black are speciality products.

Health and safety

Carbon black is a very fine black odourless powder. Pure material can only be ignited with difficulty, but impure product may be a dust explosion hazard. It may be harmful by ingestion or inhalation and will irritate the respiratory tract. It is considered to be a possible human carcinogen and mutagen.

Outlook

Capacity is expected to continue migrating from high-cost regions, particularly the EU, towards lower cost regions, primarily Asia as well as eastern Europe, Latin America and Africa. World demand growth to 2010 is projected at 2.5-3%/year, but markets are expected to put in stronger growth in the next two years as they recover from a weak 2001.

Rising consumption will be dominated by China where annual demand growth to 2005 is put at 8.3%, followed by central and eastern Europe at 6.8%, while growth in the EU is rated at 2.7%/year. Global tyre use will grow at 3.6%/year to 2005, with non-tyre rubber applications at 3.8%/year. Speciality blacks offer much higher margins and stronger growth of 4.6%/year, with the inks and toners sector looking very promising.

Major capacity additions are planned in 2004-05 in Thailand, India, Egypt, and China. World capacity will reach 9.5m tonne in 2005 and, assuming 90% utilisation, an additional 1.0m-1.3m tonne/year of capacity will be needed for 2006-10.

Data from the Carbon Black World Data Book 2003 by Notch Consulting.

Contact info@notchconsulting.com

European Union carbon black capacity '000tonne/year

Company	Location	Capacity
Cabot	Port Jerome &
	Berre-l'Etang, France	200
	Rotterdam, Netherlands	85
	Ravenna, Italy	90
Cabot Carbon	Stanlow, UK	70
Carbogal*	Sines, Portugal	35
Carbon Black Nederland*
	Rotterdam, Netherlands	80
Cofrablack*	Ambes, France	45
Columbian Carbon
	Hanover, Germany	50
	Trecate, Italy	75
	Santander, Spain	60
Columbian Chemicals
	Avonmouth, UK	115
Degussa	Kalscheuren, Germany	125
	Ravenna, Italy	70
Deutsche Gasrusswerke**
	Dortmund, Germany	100
Nordisk Carbon Black*
	Malmo, Sweden	40
* Owned 100% by Degussa
** Majority owned by Degussa
Source: Notch consulting

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