Marietta, Georgia – Birla Carbon is changing all of its North America contract price formulas, effective 1 August, in response to changes in carbon black feedstock markets.
The long-used index up to this date, US Gulf Coast high sulphur fuel oil, will change to US Gulf Coast 0.5% sulphur fuel oil in the new pricing formulas, the Indian carbon black maker announced 26 July.
The move is in line with a recent marine regulation Marpol 2020 (IMO 2020), which establishes the minimum allowable sulphur content in marine fuel at 0.5%.
“Feedstock to make carbon black is sourced from markets driven by marine fuel,” explained Birla, adding that the supply chain is adjusting now, ahead of the regulation taking effect 1 Jan 2020.
“The high sulphur index historically used in carbon black price formulas no longer reflects the markets in which feedstock is procured.
"Therefore, this change is necessary to ensure a sustainable supply of carbon black,” the company added.
Birla said it would announce further changes in pricing formulas in other parts of the world in accordance with the timing and manner in which those markets are impacted.