Asian carbon black producers smell opportunity in North America

ERJ staff report (RPN)

Akron, Ohio – North American tire production today is sluggish at best, comments a Rubber & Plastics News editorial, except for light vehicle original equipment tires. But that certainly isn't holding back foreign carbon black companies from going after customers in this corner of the world.

They – particularly Asian carbon black producers – see two factors that give them an opportunity to make their mark in North America. The first is tire capacity expansion.

The present may be slow, but tire manufacturers plan for the future. Most of the majors – Bridgestone, Michelin, Continental and Pirelli – are involved in capacity expansions on the continent. South Carolina itself has seen such a boom in plant projects it is becoming the tire manufacturing centre of North America.

Add to that the fact that South Korea's Hankook and Kumho are moving toward inaugurating production in the region, and Yokohama has announced its intention to build another plant here. That all means there will be a great opportunity for foreign carbon black makers to export into the U.S.

Which brings up the second reason the Asian – particularly Chinese and Indian – carbon black firms are interested in boosting their presence in North America: An expansion of domestic production isn't in the cards.

The U.S. is home to some significant carbon black companies. Cabot, for example, has been expanding capacity steadily for years, but not in North America. The environmental regulations in the U.S. concerning carbon black production have made expansions cost-prohibitive. Overall, too, most of the growth in the tire sector has been in Asia, and that's where you'll find the big expansion projects.

Enter the Asian carbon black exporters. Despite the cost of shipping such a bulky material into the country, it has become cost-effective enough for Asian producers to boost their presence in this region.

The days when carbon black was strictly a domestic-sourced material are gone and not likely to return anytime soon.