AMHEARST, Mass.-Future growth in the carbon black and rubber chemicals markets will continue predominantly in Asia, South America and Russia, following trends in the global tire industry.
That´s according to a study-"Global Outlook for Carbon Black & Rubber Chemicals"-compiled by Amherst-based Notch Consulting Group.
The restructuring in the U.S. tire industry means that heavy import competition in less-expensive tire lines will result in fewer tires being produced in the U.S., but the tires that will be produced here will be larger, higher-quality tires that will use more rubber and other materials per tire, said Notch Consulting President Paul Ita.
Ita said that trend toward manufacturing bigger tires will create growth in raw materials of 1-2 percent over the next several years, compared to slight declines in tire production. He noted carbon black makes up roughly 20 percent of the weight of a typical all-season passenger tire and rubber chemicals another 10 percent.
Carbon black outlook
By 2010, Ita projects worldwide carbon black demand will reach about 10.9 million metric tons with an estimated 12.9 million tons of capacity, putting capacity utilization at 84 percent. That compares to consumption of about 9.7 million tons and 11.5 million tons of capacity in 2007.
He forecasts worldwide annual growth rates of close to 4 percent a year through 2015, but only between 1 and 2 percent in North America. By comparison, growth in Asia will be about 5 percent a year, with China climbing more than 7 percent annually-following average growth of 14 percent a year from 1996 to 2006-Thailand climbing close to 6 percent a year and India a little more than 4 percent a year.
The 12 largest carbon black consumer nations during 2005-06 accounted for 78 percent of world carbon black demand, according to Ita´s data. It also marked the first two years when carbon black usage in China surpassed that of the U.S.
Tread grade carbon blacks made up 56 percent of demand in 2006, followed by carcass grades at 37 percent and non-ASTM furnace blacks at 5 percent.
During 2006, the U.S. also became a net importer of carbon black, a deficit that Ita said will widen when final figures for 2007 are reported. However, the value of the imported product averaged just $1.01 per kilogram, while exports brought in $1.40 a kilogram.
Canada and Mexico were the top two trading partners, with 64 percent of imports coming from Canada and 16 percent from Mexico. Conversely, 59 percent of exports went to Canada and 7 percent to Mexico. Mexico will be an even larger player in carbon black, with three projects-all in Altamira-expected to add a combined 125,000 tons of annual capacity.
Bridgestone Corp. has a plant set to open this year with capacity of 35,000 tons annually to supply its new tire plant in Mexico; Aditya Birla Group is building a joint venture carbon black facility slated to open next year with 60,000 tons of capability; and Nhumo S.A. de C.V. is slated to complete a modernization program at its plant there this year that will raise capacity by 30,000 tons.
Rubber chemicals outlook
Worldwide demand for rubber chemicals stood at 880,000 tons in 2006, was expected to top 900,000 tons for 2007 when totals are completed, and will approach 1.1 million tons in 2010, according to Ita.
Antidegradants and accelerators tie for the top spot among rubber chemical type with each accounting for roughly 36 percent of usage; an umbrella category titled "other chemicals" makes up the rest of demand.
He forecasts world growth rates to approach 5 percent through 2015, again with Asia-led by China, Thailand and India-the top region in projected growth at 6 percent a year. Growth in North America is expected to be less than 2 percent a year.
Like carbon black, the top 12 nations make up more than 75 percent of overall rubber chemical demand, with China easily the top consuming nation followed by the U.S.
Ita said rising demand won´t translate into capacity additions because of overcapacity in Asia "and the fact that current margins do not warrant new investments."