Cabot, Orion raising carbon black prices

BOSTON—Two major carbon black suppliers Cabot Corp. and Orion Engineered Carbons have plans to raise prices for carbon black products, beginning Aug. 1.

"This adjustment is necessary to reflect ongoing changes in the North American refining industry due to regulatory changes, residual impacts from the COVID-19 crisis, and changes in crude oil inputs to refineries," Cabot said.

The prices increases will be applied to all carbon black products sold by Cabot's reinforcement materials segment in North America, and will fall in the $200-$400 per metric ton range, depending on product and packaging type.

The price increases, Cabot said in a statement, will address "significantly higher costs" associated with providing a reliable supply of carbon black amid rising demand, driven in part by the increased production of tires and industrial rubber products in the region.

The company said it is making "significant investments" in its manufacturing network to maintain and enhance equipment reliability to meet "strong customer demand" with high plant utilization rates.

Furthermore, Cabot said its costs had gone up due to investing in environmental projects to meet requirements related to the U.S. Environmental Protection Agency's air emissions control.

Citing "the extraordinary rise in oil prices and increased borrowing costs," Cabot is limiting payment terms in North America to a maximum of 30 days, effective for all shipments on or after Aug. 1.

Orion, meanwhile, is poised to increase prices for all rubber carbon black products manufactured in Europe and the Americas.

The 20-percent price increase, Orion said, also takes effect Aug. 1.

In addition, the company is reducing payment terms by at least 50 percent "to conform with updated standards across the different regions."

According to Orion, the price adjustment reflects increased manufacturing costs, environmental control investments and operating costs, as well as continued investments to ensure reliable supply.

"Given the increased cost of feedstocks, payment terms need to be reduced to acceptable working capital levels," said CEO Corning Painter.