Materials suppliers makes headway amid price recovery

London – Some of the key rubber and related materials makers have posted strong results as prices rose earlier in the year and the market conditions recovered globally.

Arlanxeo, the synthetic rubber joint venture between Lanxess and Saudi Aramco, registered a fairly strong first half. The JV, though, expects markets to continue to be affected by “overcapacity and ongoing price pressure” in the months ahead.

In the first half, the company’s sales lifted 36.1% to €1,783 million, though this was compared with the “low level” of a year earlier. The increase reflected higher selling prices in the Tire & Specialty Rubber business unit in response to higher raw materials costs.

The rubber producer delivered a 13.5% increase in earnings (EBITDA pre-exceptionals) to €236 million in the first six months.

Russia’s Sibur increased its elastomers production volumes by 11.3% year-on-year in the first six months of this year, the Russian petrochemicals major said in a first-half results statement.

Overall revenues from sales of plastics, elastomers and intermediates for the period ended 30 June increased by 14.4% to RR76.2 billion (€1.1 billion).

Japan’s JSR Corp’s Elastomer unit also delivered a strong first-quarter business performance, the group’s results for the three months to 30 June show.

First-quarter sales came in at ¥40,528 million, 18.1% more than in the same period last year, while operating income ballooned 463% year-on-year to ¥5,765 million compared to ¥1,246 million a year ago.

JSR linked the gains mainly to a recovery in market conditions, which supported higher pricing since the second half of last year. An increase in sales-volumes also contributed.

Zeon Corp., another Japanese supplier, also saw a year-on-year 18% rise in elastomers business sales to ¥82,800 million (€631 million) in the first quarter 2017, ended 30 June.

The segment’s operating income rose 19% to ¥5,400m compared to the same period the previous year.

Shin-Etsu of Japan saw an 18.9% rise in operating income, to ¥12,174 million, at its Silicones business in the first quarter on sales of ¥49,978 million – 10.0% higher than in the same period of last year.

During the three months to 30 June, Shin-Etsu said “domestic shipments of products application for cosmetics, on-board automotive and electronics equipment “continued to be firm.”

Carbon black

Improving profitability at its Rubber Carbon Black unit lifted second-quarter earnings (adjusted EBITDA) at Orion Engineered Carbons SA to €58.4 million on group sales up 20.7% to €299.3 million.

While earnings at its Speciality Carbon Black unit fell 10.0%, the rubber fillers business “continued to improve” raising adjusted EBITDA by 23.6% from last year’s second quarter to €23.6 million, Orion announced 3 Aug.

The mixed performances left adjusted EBITDA at the Luxembourg-headquartered group up by just 1.1% year-on-year to $58.4 million.

Boston, Massachusetts-based Cabot Corp. also saw a $16-million – 46% – jump in year-on-year earnings for reinforcement materials in the third quarter of 2017, ended 30 June. The increase said Cabot, was mainly driven by higher unit margins from favourable spot market pricing as well as better product mix.

Sales for the period rose 36% to $367 with volumes dropping 1%, largely due to reduced demand in the tire markets in Asia.