LONDON—Rising prices and plant closures are among the most recent developments in the carbon black sector that have prompted industry insiders to warn about what is to come.
Driven by growth in the tire sector, demand is likely to grow as investment in car production increases and the replacement market remains stable.
A recent study by market analyst Smithers Rapra estimates the carbon black market to have grown, with demand rising from 8.4 million metric tons a year in the 2009 economic downturn to 13.2 million metric tons in 2015.
But Europe, which has seen a number of capacity reductions since the 2009 economic crash, should brace for more change. Price increases, mostly within the EU, have been announced by almost every leading producer, and analysts are waiting to see how much traction they gain. In addition, capacity reductions recently announced throughout the region could lead to the loss of certain grades. This could require manufacturers to modify some of their rubber compounds.
In May, Birla Carbon was first to announce a structural change, the closure of its plant in Hanover, Germany, and of a production line at its facility in Alexandria, Egypt. The company said it was restructuring its operations in the Europe and Africa region, including reducing corporate personnel, to preserve the long-term future development of the business.