Cabot plans to remove carbon black capacity in Americas and Europe

On February 4, Cabot Corporation held its earnings call for Q1 FY2026. During the call, Cabot's CEO Sean Keohane announced that Cabot plans to rationalize carbon black capacity in the Americas and Europe due to declining tire production levels caused mainly by tire imports from Asia. The weaker demand environment resulted in a protracted contracting season and year-over-year price reductions for carbon black in western regions and a loss of volumes in Europe. According to Keohane, price impacts "varied by region, but were generally in the range of 7% to 9% decline as compared to 2025 levels, reflecting the competitive pressures in the market."

The capacity closures are discussed at 9:18 on the call and on slide 5 of the accompanying presentation:

Finally, as a result of the declining carbon black utilization levels in Western geographies, we believe it is prudent to look at our network capacity and align it to current demand levels. With this in mind, we are finalizing plans to rationalize carbon black capacity in the Americas and Europe to position us to operate more efficiently, enhance profitability, and maintain flexibility as we navigate this challenging demand environment. We will communicate any decisions when they are made.

No further details were provided. Additional cost cutting efforts include headcount reductions in Reinforcing Materials, procurement savings, and "benefits from accelerated technology deployment for improved yield and manufacturing efficiencies." Cabot also has reduced capital expenditures for the full year. In other news, Cabot recently completed its acquisition of Bridgestone's carbon black plant in Mexico.

Here is the Seeking Alpha transcript of the call.