Interview with the Carbon Black World Advisory Board

As Carbon Black World draws closer, we revisited some of the industry’s hottest topics with the members of the Carbon Black World Advisory Board.  In a free-ranging discussion on the challenges and opportunities facing the industry today, they had much to say.

Advisory Board Members Include:

  • Ricky Magee,  Birla Carbon (chair)
  • Bill Jones,  Sid Richardson Carbon & Energy Co. (chair)
  • Thomas Hanel,  Pirelli Tire SpA
  • Paul Ita,  Notch Consulting
  • Bruce Lambillotte,  Smithers Rapra
  • Shana Sylvester,  Cabot Corporation
  • Fran├žois Terrade,  PRO2ACT MANAGEMENT
  • Wei Zhenwen,  Doright Co., Ltd.

This industry is facing many opportunities – and many challenges.

From health and environmental pressures to sustainability and feedstock supply and quality, we see major challenges – and opportunities every day.  Feedstocks are a huge factor. Transportation issues are tremendously important and we are very much looking forward to learning more about the future of transportation technology and its impact on the Carbon Black Industry – and the tire industry.

Feedstocks continue to be the largest driver of cost to manufacturing carbon black. Given the wide widespread practice of passing through feedstock costs, with pricing formulas, they are a major driver of carbon black price as well.   Since raw materials are also a major portion of the total cost to manufacture a tire, they also have an eventual impact on the price of tires and thus affect consumers as well.

As oil costs continue to go up and because feedstock costs are correlated with oil prices, any large swing in oil prices will significantly affect feedstock costs.

It is also important to remember that feedstock costs are not perfectly correlated with oil prices and do not track the major oil price indices perfectly.  For example, a large swing in oil prices can trigger structural changes in feedstock markets, pulling new consumers into the market and/or driving some producers out of the market.  This has been evident recently as feedstock costs have not fallen as much as major oil indices over the past year.

If oil prices are low, this shows us then how fixed costs become much more visible. We would expect that this is going to impact feedstock quality and increase timely throughput - and minimize off-quality production.

And then there are factors influencing tire production. Large swings in input prices for tires can have significant impact on the retail tire markets and the structure of the industry.  For example, the overall raw material cost of a tire is down significantly from 2-3 years ago due in large part to decreases in rubber and reinforcing filler prices.  These changes impact different tire manufacturers in different ways.  Major tire manufacturers, due to their market share and brand strength, are generally able to maintain prices for replacement tire and boost profits, whereas smaller tire makers are often forced to pass costs onto their customers - but can see an increase in demand due to improved price competitiveness.  One example here is that many customers have stopped retreading truck tires, choosing instead to purchase new, imported tires because the cost of a new tire has decreased so much.

This year’s Carbon Black World agenda is very strong – with new innovations inside the industry to those ideas challenging us, we expect really great insight. Truly this conference will cover the full range of issues affecting our industry: the good, the bad and the ugly. We need to know all aspects to make good and informed decisions. 

Looks like a great preview to what's on the horizon – and very timely topics.

Regulations remain a major concern – influencing health concerns and more. From increases in CAFE standards influencing the tire industry – and rolling downhill to carbon black makers – to sustainability issues facing the industry. With new types of carbon black – and the potential threat and rise of non-carbon black materials including dandelions and silica - there are a lot of concerns and conversations to have at this year’s event.

We are also very excited to gain insight from Kevin Boyle, COO of Birla Carbon as he focuses on sustainability in his closing keynote address.

Have a question for the Advisory Board?  Submit your question below or meet them in person at Carbon Black World, May 25-27 in Fort Worth!

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