Smithers Rapra suggests that with less availability, plants will be operating at higher utilisation rates, achieving scales of economy and realising more profitable operations.
Another factor, though, is the role played by the new and existing entrants into the European carbon black market.
Russian and Chinese imports have been present in Europe for the past few years while Indian and Saudi producers are now stepping up their efforts.
Yaroslavl and Omsk, the biggest Russian players, have a number of competitive advantages over their European counterparts.
According to von Wolfersdorff, “the size of their manufacturing lines helps with economies-of-scale, while the access to low-cost feedstock helps with producing at low cost.”
“Shipping costs”, he said, “are a key factor but even then, these can be overcome with distribution- and decanting-stations and by bringing production further towards the West as Omsk Carbon is doing with their Mogilev site in Belarus.”
“We are talking about a price difference of several hundred Euros between Russian carbon black and comparable tier 1 products from Cabot, Birla and Orion,” continued von Wolfersdorff.
Meanwhile, new production of carbon black is coming into Europe from Saudi Arabia. Kemya, a joint venture between Sabic and ExxonMobil, and licensed by Continental Carbon Co. started up its 50 kilotonnes-per-annum carbon black plant in Al-Jubail, Saudi Arabia in March.
The plant output, which will go mainly to the tire industry, is to be commercialised by Continental Carbon Europe, under the Continex tradename, mainly in Europe and the Middle East.
All these developments will keep the European market for carbon black in a state of uncertainty this year, and any further movement in oil feedstock prices will add to the complexity.