Cabot Reinforcement Materials earnings fall despite higher volumes

Boston, Massachusetts – Cabot Corp. has reported lower third quarter earnings in its Reinforcement Materials business, which mainly produces rubber grade carbon black.

For the quarter ended 30 June, segment EBIT fell 24% year-on-year to $97 million (€84 million), while earnings (EBITDA) declined 20% to $117 million, Cabot reported 4 Aug.

Segment sales for the three-month period, meanwhile, grew 4.5% to $599 million.

Gross profit per tonne weakened following the company's calendar-year 2026 tire customer agreements, the company reported.

Volumes increased 5% year-on-year, driven by growth in Asia-Pacific (+10%) and the Americas (+4%), supported by additional capacity in Indonesia and Cabot's acquisition in Mexico.

Volumes in Europe, Middle East and Africa (EMEA) declined 4%.

The segment results were impacted by “challenging market conditions and pricing headwinds from our 2026 annual tire customer agreements," said outgoing president and CEO Sean Keohane.

According to Cabot, higher volumes and a more favourable regional product mix only partially offset the lower gross profit per tonne resulting from the customer contract renewals.

In an earnings call on the same day, Keohane said market fundamentals were showing signs of improvement, pointing to lower tire imports into western markets.

The executive welcomed the EU's recent anti-dumping duties on Chinese tire imports, saying the measures should be "directionally positive" for the European tire industry over time.

Year-to-date tire imports into the EU were down 16% through April, while imports into North America declined around 3%, Keohane said, noting that such trends were "encouraging and supportive of market fundamentals."

According to the Cabot leader, most Chinese tire makers fall inside the 24%-45% range of EU anti-dumping duties.

Furthermore, there are additional countervailing duties measures “that could materially increase that total duty burden,” he added.

Those duties, according to Keohane, “are possibly going to be announced by August… with an expectation of definitive measures by later in the year, December.

Looking ahead, the company expects a modest sequential decline in fourth-quarter EBIT, citing normal seasonal volume weakness and a less favourable regional product mix, particularly in EMEA.

"We normally experience some seasonality in this quarter," Keohane added. "The demand environment remains as expected with that normal seasonality embedded in it."