KINGWOOD, Texas—Orion Engineered Carbons L.L.C. sees definite opportunities for growth in the carbon black industry, but it knows it is just as important to manage the uptick in demand properly.
Officials for the Kingwood-based firm cite studies that show the global carbon black market will grow from 4-5 percent a year between now and 2019. And with nearly 90 percent of carbon black output used in the rubber industry—with 70 percent going to tires alone—they know they need to ensure they target the firm's efforts both in terms of geography and product lines.
“It's an exciting time to be in the carbon black market,” said Jose Briones, Orion marketing manager for rubber in North America. “There is growth out there. There are technology trends out there as well. There is a shift from commodity to more specialized grades, so I think we see a very bright future ahead.”
From an overall demand growth standpoint, much of that comes from the economy, he said. That is reflected in the growth of automobile sales and tire unit shipments.
“You could argue we're coming out of the recession,” Briones said. “We monitor the sales of tires carefully, related to both car sales and the replacement tire market. We need to keep a close eye on the sales and the trends, and associated variables, like the number of miles driven.”
Orion said it is in good position to meet the increase in demand, having back-up supply capabilities in the event of supply interruptions or unexpected peaks in demand. It has 14 production facilities globally, operates four Applied Technical Centers, and has installed “Orion Design” reactors in two U.S. plants, with plans to install others in the U.S., Asia and South Africa.
But the shift to specialty grades of carbon black is related more to other issues. For tires, that means new Environmental Protection Agency testing on rolling resistance for tires that he said could lead to a shift in tire buying from car manufacturers.
In the case of mechanical rubber goods, there are more stringent demands for such things as automobile seals that likely will cause larger demand for what the firm calls the clean grades for the MRG market.
“This is not a new trend in Europe but now is happening in the U.S.,” Briones said, something that is not a strange occurrence. “Europeans tend to push for higher quality and higher performance. Then eventually those demands translate to U.S. demands.”