BOSTON—Cabot Corp. has seen a substantial improvement in the performance of its reinforcement materials segment, which includes the production of carbon blacks for tires and rubber goods.
Over the three months to end of June, the segment saw earnings return to positive territory at $85 million, up from negative $5 million reported last year.
Segment sales were up 143 percent year-on-year at $479 million, reflecting higher volumes, which were driven by demand increases in all regions, Cabot said Aug. 9.
"I think the business has really done a great job," President and CEO Sean Keohane said, noting that volumes are "in and around the 2019 levels."
Looking forward, Keohane feels "really good about the level of performance" in the rubber blacks business, and believes the segment will continue to focus on "commercial excellence, strategic pricing and market management," to maintain momentum.
Furthermore, the company will continue its efforts around yield, energy recovery and overall equipment effectiveness.
In addition, Cabot expects to benefit from strong presence in Asia-Pacific—particularly in China—which represents 35-40 percent of the world's tire production and 40 percent of global carbon black consumption.
Despite the positive backdrop, however, Keohane warned that demand in some key end-use markets, such as tires and cars, is still below pre-pandemic levels.
"The tire side is still a few percent below, if you look at LMC's forecast and then on the auto build side, IHS's outlook is still a little below," he said.