Boston, Massachusetts – Cabot Corp. has seen a substantial improvement in the perofmrance of its reinforcement materials segment, which includes the production of carbon blacks for tires and rubber goods.
Over the three months to end of June, the segment saw earnings return to positive territory at $85 million (€72 million), up from negative $5 million reported last year.
Segment sales were up 143% year-on-year at $479 million, reflecting higher volumes which were driven by demand increases in all regions, Cabot announced 9 Aug.
“I think the business has really done a great job,” said president and CEO Sean Keohane, noting that volumes are “in and around the 2019 levels”.
Looking forward, Keohane said he felt “really good about the level of performance” in the rubber blacks business.
Keohane said that the segment will continue to focus on “commercial excellence, strategic pricing and market management,” to maintain momentum.
Furthermore, the company will continue its efforts around yield, energy recovery and overall equipment effectiveness.
In addition, Cabot expects to benefit from strong presence in Asia-Pacific - partuicularly in China - which represents 35% to 40% of the world's tire production and 40% of global carbon black consumption.
Despite the positive backdrop, however, Keohane warned that demand in some key end-use markets, such as tires and cars, is still below pre-Covid levels.
“The tire side is still a few percent below, if you look at LMC's forecast and then on the auto build side, IHS' outlook is still a little below,” he added.
Comments in transcript sourced from Seeking Alpha.