Cabot upbeat about China despite current slump

Boston, Massachusetts – While a year-long automotive slowdown and an ongoing trade war with the US have impacted the Chinese market, Cabot president & CEO Sean Keohane is optimistic about long-term business prospects in the country.

“China still has the largest car parc in the world and many of these cars have yet to hit their replacement cycle,” noted Keohane.

However, the Cabot boss admitted that China was “certainly a challenging environment” for business currently.

According to Keohane, car manufacturing in China remains very weak, with June marking the 12^th consecutive month of year-on-year production decline.

On a year-to-date basis, automotive vehicle production is down about 16% in the country.

The decline in demand, Keohane noted, has created a more competitive environment in China – putting pressure on prices over the “last couple of quarters.”

Another factor, said the Cabot boss, is the current uncertainty being created by trade disputes between US and China. This, he said, is limiting the ability of companies to “really plan properly.”

“As a result, they are very cautious on inventory levels. And again, that creates - or contributes to a more competitive environment in the carbon black side of things,” he noted.

“We certainly have to work through this in a somewhat unprecedented short-term situation in China, and we're doing that,” Keohane concluded.