31 January 2013 22:29 [Source: ICIS news]
HOUSTON (ICIS)--China and Asia have become more competitive markets for carbon black than expected, and weak demand there has added to the challenge, the chief executive of US-based Cabot said on Thursday during the company’s Q1 2013 conference call.
Patrick Prevost, president and CEO of Cabot, said truck and bus tyre production declined in the latter part of 2012, which hurt the company’s carbon black sales in China. Also, local competition there has grown stronger, he said, and there has been some price erosion.
Still, the company is running its carbon black plants “flat out” in China in anticipation of a turnaround in tyre demand, and thus carbon black demand, he said.
“We have been disappointed with how the tyre industry has been positioning itself in the last few quarters,” Prevost said. “We look at longer-term trends in terms of tyre demand against economic activity, and we believe that currently that we are below trend.”
Prevost pointed to 2009 as being a similar situation in regard to tyre demand, and how the tyre and carbon black market turned around quickly that year in response to a surge in economic activity.
“The underlying demand for tyres seems to be well below the trend line, which gives us hope that there will be a recovery late in the year,” Prevost said.
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