Orion seeks silver lining in Mideast tension

ERJ has an article highlighting recent comments by Orion SA's CEO Corning Painter regarding potential impacts of the geopolitical disruption in the Middle East on carbon black markets. While cautioning that the company has no unique insights into how long the Iranian conflict may last or where energy prices ultimately will settle, Painter said that "Western chemical industry constituents are clearly experiencing tangible benefits from the supply chain disruptions that have ensued since the conflict was initiated.” These disruptions have advantaged Western producers through pricing momentum, expanded margins, and a stronger preference for regionally produced raw materials such as carbon black. As for higher oil prices, Painter pointed out that a $10/bbl increase in crude prices over a 12-month period translates into $7-$10 million of higher annualized EBITDA levels for Orion. Raw material shortages in Asia, particularly for key tire materials such as butadiene, could impact tire exports and favor local production.