BOSTON—Cabot Corp. is raising its feedstock surcharge to 3 cents per pound for all rubber carbon blacks sold in North America, beginning Oct. 1.
The new fee replaces the previously announced feedstock surcharge of 1cent per pound that has been in effect since the beginning of April, Cabot said in a Aug. 19 statement.
The price hike was prompted by the 2020 marine regulation Marpol 2020 (IMO 2020), which establishes the minimum allowable sulphur content in marine fuel at 0.5 percent beginning next year. The increase, Cabot said, also will enable the company to remain "a reliable supplier of high-quality carbon black products to meet growing demand in the region."
The majority of rubber carbon black feedstock purchased by the company in North America is a by-product of the crude oil refining process. In response to Marpol 2020, the market is seeing an increase in demand for low sulphur fuel oil, Cabot said.
While acknowledging the "long-term benefits" of Marpol 2020 to the environment and human health, Cabot noted that the regulation also presented "disruption and additional costs across multiple industries."
Carbon black suppliers Orion Engineered Carbons and Birla Carbon also disclosed similar measures recently in an effort to offset the rapid rise in feedstock costs.