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Sid Richardson foresees carbon black shortages in US by 2016

The United States can expect to see supply shortages of carbon black by 2016, according to Gregory King, vice president of marketing for Sid Richardson Carbon Co. As reported by Tire Business, Mr. King made the comments at the Clemson University Global Tire Conference, held every year in Hilton Head, South Carolina.

“There will be a shortage of carbon black starting in 2016, provided that everyone’s expansion plans for tire production go forward as assumed,” Mr. King said. “Starting in 2016, we’re going to be out of balance.”
Carbon black nameplate manufacturing capacity in the U.S. and Mexico stands at 4.63 billion pounds per year, Mr. King said. However, EPA efforts to control sulfur oxide and nitrogen oxide emissions from U.S. carbon black facilities will cause domestic capacity to fall to 4.11 billion pounds by 2020, according to Mr. King. Projected demand for that year points to a production shortage of 465 million pounds.

As previously report on this blog, Cabot Corporation was the first of the US carbon black makers to reach an agreement with the EPA regarding emission levels. As a part of the settlement, Cabot committed to install advanced control technology and continuous emission monitoring systems on its U.S. plants. The control technologies will be installed and commissioned over a six-and-a-half year time period at a cost of approximately $85 million.

Sid Richardson and the other US carbon black makers are in active talks with the EPA on how to cut emissions, but Mr. King pointed out in his comments that a one-size-fits-all approach may not work.

“Controlling sulfur-oxide emissions is a matter of installing wet scrubbers,” he said. “We have two plants in west Texas, and we’re not sure we can get enough water there to absorb all emissions. Maybe we could consider air preheating or other options, or find ways to use less oil.” In any case, the industry can expect an increase in production costs because of the operating cost components over and above the capital costs, Mr. King said.

Notch Consulting is currently tracking $5 billion in new investments in the North American tire industry from 2013 through 2020, of which $4.7 billion will be in the United States.

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