Tokai reports pressure on carbon black margins

Tokyo – Tokai Carbon has reported a decline in first-quarter earnings from its carbon black business, in part due to pressure on pricing.

Sales for the carbon black business fell 1.7% year-on-year to Yen38.9 billion (€240 million) and operating income by 20.6% in year-on-year to Yen4.5 billion.

Volumes varied in different regions but overall remained at the same level as the first quarter of 2024, Tokai reported 15 May.

However, primarily due to a decline in selling prices, both net sales and operating income decreased year-on-year, Tokai added.

However, the Japanese group said its operating income was higher than estimated at the beginning of the year, when Tokai said it expected a Yen25 billion drop in earnings for 2025. 

At the time, the group said it anticipated tire production to continue to grow steadily at an annual rate of 3%, supporting higher sales next year.

However, parallel operation of a new production base in Thailand alongside the existing facility is set to weigh on earnings until the third quarter of 2026, Tokai said.

The new plant in Thailand is scheduled to start operations by mid-2025, according to the Japanese group.