Carbon Black       

*Millions of pounds per year of carbon black. Production is by partial oxidation and thermal cracking of atomized liquid hydrocarbons, except for the thermal product of Degussa Engineered Carbons at Borger, Tex., which uses natural gas.

Degussa (Dusseldorf, Germany) and Engineered Carbons (Port Neches, Tex.) combined their respective North American carbon black businesses in April of this year. The 50-50 joint venture, Degussa Engineered Carbons (Parsippany, N.J.), has seven plants at six sites with a capacity of more than 1 billion pounds per year, overtaking Columbian Chemicals as the second-largest carbon black maker in North America, behind Cabot in the number one spot. Degussa has sales responsibility for the products of the joint venture.

In a realignment of its carbon-black operations in North America, Columbian Chemicals temporarily halted production at the company's facility in El Dorado, Ark., last December. The company said the move was based on continued overcapacity in the carbon-black industry and an uncertain business outlook for the next 12 to 18 months.

Smaller carbon black producers include Chevron, Cedar Bayou, Tex., acetylene black; Ebonex, Melvindale, Mich., bone black; General Carbon, Los Angeles, Calf., lampblack; and Hoover Color, Hiwassee, Va., bone black.

Profile last published 5/29/00; this revision 6/24/02.

DEMAND
2000: 3,680 million pounds; 2001: 3,460 million pounds; 2005: 3,700 million pounds, projected. Demand equals production plus imports (2000: 289 million pounds; 2001: 240 million pounds) less exports (2000: 300 million pounds; 2001: 309 million pounds).

GROWTH
Historical (1996 - 2001): 0.4 percent per year; future: 1.7 percent per year through 2002.

PRICE
Historical (1996 - 2001): High, $0.4325 per pound, list, fast extruding furnace black (FEF) ASTM N550, bulk, c.l., works; low, $0.3350, same basis. Current: $0.4325, same basis. Current market price is about $0.3000, same basis.

USES
Tires and tire treads, 70 percent; belts, hoses and other automotive products, 10 percent; industrial rubber products, 9 percent; miscellaneous including inks, paints and plastics, 11 percent.

STRENGTH
Industry restructuring (Degussa and Engineered Carbons) plus Columbian Chemicals’ removal of 120 million pounds of capacity from the marketplace have helped strengthen this oversupplied industry segment. Feedstock prices are down from where they were a year ago.

WEAKNESS
The tire business was hit hard by the soft economy in 2001. Tire shipments were down in replacement and OEM categories for all segments; cars, SUVs and trucks. Passenger car replacements were off by 3 percent at 193 million units, and off 10 percent for OEM tires, at 54 million units. Consequently, demand for carbon black was down 6 percent over the previous year, resulting in an industry-operating rate just short of 80 percent.

OUTLOOK
Carbon black demand is expected to follow the current economic trend and grow proportionally with the recovering GNP rate. Demand in the largest segment, the tire business will be about 1.5 percent per year while the smaller specialty blacks will grow by more than 4 percent. Overall, demand is forecast at 1.7 percent.