NUREMBERG, Germany—Cabot Corp. expects a continued strengthening in demand for its rubber carbon blacks as markets recover from the COVID-19 downturn and the automotive industry slowly returns to normal.
The short-term outlook for the global market is expected to remain strong as "customers continue to produce tires," Jaume Campana, Cabot's vice president and regional business director for the reinforcement materials segment in EMEA, told European Rubber Journal.
Despite the looming recession and high oil and gas prices, people are traveling more by car, especially as the vacation and holiday travel seasons pick up, Campana said. At present, the tire market comprises at least 70 percent replacement tires, he said.
"Furthermore, inventories were down during COVID-19 and we see customers rebuilding inventories," he said. "So, the replacement market looks strong, although there is a lot of uncertainty with regard to a possible recession and inflation."
The OEM market, on the other hand has been very weak and Europe saw a 17 percent year-on-year drop in car sales in May, the Cabot executive pointed out.
"However, when we speak to our customers whose specialty is to supply to the OEM market, they say they can see the light at the end of the tunnel, meaning that the orders are increasing," Campana said.
That optimism, he said, could indicate that the microchip shortage crisis, which has crippled the automotive industry for the most of 2021, finally could be easing.
"If you talk to OEMs, they will tell you that their order books are full, and these are orders taken a year ago," he said. "So, a combination of strong replacement and if you can call it a 'rebound' in OEM markets gives us confidence about 2022."