Tire Business report
Hilton Head, South Carolina - The US tire industry will start seeing shortages of carbon black as early as 2016 as carbon black producers face increasingly stringent environmental regulations, according to Gregory King, vice president of marketing for Sid Richardson Carbon Co.
Speaking at the 30th annual Clemson University Tire Industry Conference, King said pending US Environmental Protection Agency (EPA) regulations could cause both increased costs and shuttered U.S. capacity within the carbon black industry.
“There will be a shortage of carbon black starting in 2016, provided that everyone’s expansion plans for tire production go forward as assumed,” King said. “Starting in 2016, we’re going to be out of balance.”
He predicted that China would take up the slack in carbon black production left by the US.
King based his projections on both the analysis and market model by Simon-Kucher & Partners and the capacity and demand estimates made by Notch Consulting Group.
Carbon black nameplate manufacturing capacity in the US and Mexico stands at 4.63 billion pounds per year, King said.
However, EPA efforts to control sulfur oxide and nitrogen oxide emissions from US carbon black facilities will cause domestic capacity to fall to 4.11 billion pounds by 2020, according to King. Projected demand for that year points to a production shortage of 465 million pounds.
Among US carbon black producers, Cabot Corp. has already settled with the EPA, according to Mr. King. Cabot has agreed to invest approximately $90 million in two U.S. carbon black plants, and to reduce sulfur oxide and nitrogen oxide emissions in the U.S. by 80 to 90 percent, he said. The company will spend the next several years executing the agreement.
Sid Richardson and other US carbon black makers are cooperating willingly with the EPA in discussions on how to cut emissions, said Mr. King, adding: “We all want to do the right thing.”