Cabot, Orion raising carbon black prices, tighten payment terms
17 Jun 2022
Increase prompted by emissions control costs, high feedstock prices and "extraordinary rise in oil prices"
Boston, Massachusetts – Two major carbon black suppliers Cabot Corp. and Orion Engineered Carbons have announced plans to raise prices for carbon black products, effective 1 Aug.
In a statement 16 June, Boston-based Cabot said it would increase prices for all carbon black products sold by its reinforcement materials segment in North America.
Price increases will range from $200/tonne (€190/tonne) to $400/ tonne, depending on product and packaging type.
The price increases, Cabot said, will address “significantly higher costs” to provide reliable supply of carbon black amid rising demand driven by the increased production of tires and industrial rubber products in the region.
The company said it is making “significant investments” in its manufacturing network to maintain and enhance equipment reliability to meet "strong customer demand" with high plant utilisation rates.
Furthermore, Cabot said its costs had gone up due to investing in environmental projects to meet requirements related to the US Environmental Protection Agency’s (EPA) air emissions control.
Cabot said it would also increase the feedstock surcharge applied to all carbon black products sold in North America, effective 1 Aug.
“This adjustment is necessary to reflect ongoing changes in the North American refining industry due to regulatory changes, residual impacts from the Covid-19 crisis, and changes in crude oil inputs to refineries,” it added.
Citing “the extraordinary rise in oil prices and increased borrowing costs”, Cabot said it was limiting payment terms in North America to a maximum of 30 days, effective for all shipments on or after 1 Aug.
In a separate statement, another major US-based supplier Orion also said it was increasing prices for all rubber carbon black products manufactured in Europe and the Americas.
The 20% price increase, Orion said, will come into effect 1 Aug.
In addition, the company is reducing payment terms by at least 50% “to conform with updated standards across the different regions.”
According to Orion, the price adjustment reflects increased manufacturing costs, environmental control investments and operating costs, as well as continued investments to ensure reliable supply.
“Given the increased cost of feedstocks, payment terms need to be reduced to acceptable working capital levels,” said CEO Corning Painter.