Orion says rubber blacks 'poised for growth' despite 50% earnings drop

Houston, Texas – Orion SA’s rubber carbon black business has reported a weak first quarter but the segment is poised for growth as demand starts to pick up and the Middle East conflict remains unresolved.

Segment volumes for the quarter ended 31 March rose 1% year-on-year to 192.5 kilotonne, while sales dropped 9% to $290 million (€247 million), Orion reported 6 May.

The company linked the decline in sales to lower pricing, predominantly the pass-through effect of lower year-over-year oil prices, and adverse regional mix.

These were partly offset by higher volumes and favourable foreign currency translation.

The segment’s adjusted earnings (adjusted EBITDA) decreased 53% year-on-year to $19 million, driven primarily by the pricing outcome of calendar 2026 supply agreements.

Earnings were also impacted by the pass-through effect of lower year-over-year raw material costs, and unfavourable regional mix, partially offset by higher volumes and foreign currency translation.

Rubber segment results, Orion said, were “consistent with expectations, affected by calendar 2026 pricing agreements, as well as soft demand conditions in North America.”

Tire build rates, said the company, were down in North America because of sluggish channel sell-through early in the year, partly related to adverse winter weather.

In addition, “lingering tire channel inventories” from the 2025 increase in low-value tire imports impacted demand.

The increase in volume was primarily due to higher demand in EMEA and APAC, said Orion, noting that tire production in the US was down in January and February.

On the short-term outlook, Orion said it expected “modest demand improvement” which started late in the first quarter to persist in the second quarter.

The company also expects its “regional footprint” to benefit from the impact of the ongoing Middle East conflict on key raw materials in Southeast Asia, but noted that ‘durability of demand strength was unclear.”

“The dynamic backdrop resulting from the Middle East conflict is a test of Orion’s agility,” said CEO Corning Painter.

The Orion team, he said, responded with agility, “executing price increases and surcharges, flexing our supply chain to meet higher demand, and judiciously managing inventories.”

“Despite uncertainties associated with the conflict, including its impact on energy prices and the global economy, our business’s resilience and asset footprint have enabled us to support customers during these dynamic times,” continued Painter.