European
Carbon Black prices soar, tire manufacturers turn to recycling carbon black
With the high volatility of crude oil and naphtha prices in July, coupled with the recovery of demand in the European tire market and supply chain challenges, the price of carbon black in Europe sharply increased in July. It is reported that the delivery price of carbon black at Hamburg Port in July once soared to around $1550 per ton. Faced with soaring costs, many tire and rubber product manufacturers have begun to consider using recycled carbon black (rCB) as an alternative, which has aroused deep concern from tire suppliers and other partners. It is worth mentioning that mainland tire companies have recently made a commitment to purchase recycled carbon black for mass production of tires.
It is reported that Continental Group and Pyrum Innovations have jointly announced that they have signed a long-term procurement agreement aimed at applying recycled carbon black to the mass production of future passenger car tires. In the passenger car tire manufacturing of Continental Group, the use of carbon black accounts for 15% -20% of the total tire volume, and the specific proportion varies depending on the tire model.
Red Sea turbulence and trade tensions push up carbon black prices
Since the beginning of 2024, the price of carbon black in Europe has remained high, mainly due to the turbulent situation in the Red Sea region, which has led to increasingly tense trade relations between Asia and Europe. The crisis of the Suez Canal further intensified the pressure on the supply chain, and the insufficient shipping capacity in the Indian Ocean region further worsened the supply situation in Europe.
In response to the implementation of the Russian ban, many European importers have increased their imports from countries in the Asia Pacific region such as South Korea and India. In addition, due to the suspension of the US Gulf of Mexico route, shipping companies have begun to shift their focus to the Indian Ocean. India's main export inventory is now ready and adjusted quotations have been proposed for goods shipped to Europe. It is worth noting that the spot price of Durgabur N220 carbon black quickly climbed from $1435 per ton to $1485 per ton in the last two weeks of July. Meanwhile, with the increase in German car production in June, the demand forecast and business guidance of upstream tire manufacturers have also correspondingly improved. Hubtrac raised its tire sales forecast for the third quarter last month, which in turn drove the delivery price of carbon black at the port of Hamburg to soar to $1550 per ton at the end of July, a significant increase of 50% compared to January.
The market prospects for recycling carbon black are broad, but the cost issue still needs to be resolved
In fact, recycling carbon black is increasingly favored by the market. According to Mr. Weibold, the head of Austrian consulting firm Robert Weibold GmbH, it is predicted that the annual production of recycled carbon black is expected to exceed 500000 tons in the next 3 to 5 years. He further emphasized that with the rapid growth of market demand, the price of pelletized recycled carbon black has gradually moved away from dependence on native carbon black and formed an independent value system. Europe's goal is to increase its annual processing capacity to 672000 tons in the coming years, with the aim of occupying 11% of the global market share. However, a European market insider pointed out that despite significant price discounts for recycled carbon black, its cost still cannot compete with raw carbon black due to high carbon costs (currently around 68 euros per ton) and energy consumption during the recycling process.
