Boston, Massachusetts – Cabot Corp. has reported some mixed trends impacting its carbon black business in North America, while noting strengthening demand for its products in Europe.
On the American side, Cabot president and CEO Sean Keohane said prospects for long-term growth in the tire market “remain solid” but flagged up concerns about the OTR market and inventory levels.
“We've seen announcements over the last several years of a number of new tire plants and certainly seeing those coming on line and further ones under construction,” Keohane said in a 1 Nov conference call*.
On the other hand, he said, Cabot was “watching carefully, the near-term impacts from some softness in the OTR market as well as overall tire inventory levels, given the apparent channel stuffing by Chinese TBR producers in advance of the anti-dumping duties…”
Keohane went on to comment on the spot-market situation in Europe, where he said “we continue to see strength in Europe driven by solid demand as well as the impact from some recent plant closures.”
On 31 Oct, Cabot reported a 36% year-on-year rise in fourth-quarter earnings (EBIT) at its Reinforcement Materials business unit to $42 million, despite a 14.5% drop in sales to $289 million. The rise, it said, was driven by “favourable pricing and product mix”.
Volumes fell 3% during the period on lower volumes in EMEA and Asia, mainly due to the closure of the Merak site, Indonesia, last year.
In terms of regional demand, Americas grew by 1% while EMEA saw the biggest drop in demand - down by 6%.
*Comments sourced from conference call transcript by Seeking Alpha.