Cabot raising feedstock surcharge in North America

Boston, Massachusetts – Cabot Corp. is raising its feedstock surcharge to $0.03/pound for all rubber carbon blacks sold in North America, effective 1 Oct.

The new fee replaces the previously announced feedstock surcharge of $0.01 /pound that has been in effect since the beginning of April, Cabot announced in a 19 Aug statement.

The move is prompted by the upcoming 2020 marine regulation Marpol 2020 (IMO 2020), which establishes the minimum allowable sulphur content in marine fuel at 0.5% as of 2020.

According to Cabot, the majority of rubber carbon black feedstock purchased by the company in North America is a by-product of the crude oil refining process.

In response to Marpol 2020, the market is seeing an increase in demand for low sulphur fuel oil, Cabot added.

While acknowledging the “long-term benefits” of Marpol 2020 to the environment and human health, Cabot said the regulation also presented “disruption and additional costs across multiple industries.”

Other carbon black suppliers, Orion Engineered Carbons and Birla Carbon also announced similar measures last month to "recover the rapidly rising feedstock costs."

The feedstock surcharge, Cabot said, will enable the company to remain “a reliable supplier of high-quality carbon black products to meet growing demand in the region.”