LUXEMBOURG—Orion Engineered Carbons S.A. has reported a 20.1 percent increase in rubber black revenue at $249 million for the second quarter of 2018.
Earnings also increased by 38.4 percent to $36 million in the second three months of the year, according to the firm's second quarter financial report. The gains were linked to growth in rubber grade sales, pass through of higher feedstock costs to customers with index-pricing agreements, positive exchange rate effects, increased sales volumes and base price improvements.
"Healthy demand for rubber blacks has kept our plants operating at a high utilization rates," Orion CEO Jack Clem said in a statement.
"The largest contributor to capacity build in recent years has been China. This has halted due to regulatory pressures and significant changes in feedstock economics," noted a company presentation.
The addition of new tire capacities in Europe and the U.S., and economic recovery in Latin American, also have contributed to stronger demand in these regions, Orion said.
According to Clem, the favorable supply/demand balance will support stronger spot pricing during the year and establish "a strong backdrop for the negotiations in this segment for next year."
Over the second quarter, Orion completed the realignment of its South Korean production footprint, which it launched in 2016. This included the consolidation of production at Bupyeong (Incheon) facility in Seoul and opening of new specialty and rubber carbon black lines in Yeosu, South Korea.
Additionally, the company said it is continuing to improve its technical rubber grade mix in China.
"These continuing initiatives to improve production capability, upgrade mix and improve prices, along with favorable demand/supply dynamics, position us well to take full advantage of improving global economic conditions," Clem said.