Carbon Black Market

Global Industry Analysis (2017 – 2020), Growth Trends, and Market Forecast (2021 – 2025)

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Carbon Black: Not Just a Black Powder but an Integral Part of Modern Automotive Culture       

Modern tires with carbon black reinforcement drive extra miles as compared to older tires that need to be changed after every 5,000 kms. Carbon black allows new age tires to perform even after running for 50,000 kms. The automotive industry has witnessed a remarkable change with the uptake of carbon black.

Today, carbon black is a vital element in production of many products that are used in our day-to-day life, wherein stronger and deeper black color is desired. This fine black powder composed of elemental carbon is made by burning hydrocarbons such as coal tar, ethylene tar, FCC tar, or charred vegetable matter.  Carbon black is manufactured by partial combustion and pyrolysis of low-value oil residues usually derived from coal or crude oils at elevated temperatures under controlled conditions. More than 95% of the carbon black is manufactured through furnace black process.

Carbon black is primarily used as reinforcement agent, but is also used as pigment, conductive or insulating agent, rheology modifier, and UV stabilizer in variety of rubber and non-rubber applications. In many places, carbon black is used as an additive to augment material performance including viscosity, conductivity, and static charge control. It is used in rubber tires, industrial rubber goods, and automotive rubber parts as a reinforcing agent or as coloring agent in inks, paints & coatings, plastics, wire & cables, etc.

Specialty Carbon Black to Offer Lucrative Growth Prospects Compared to Commodities

Carbon black is widely consumed in three grades: rubber carbon black, mechanical rubber goods (MRG), and specialty carbon black. It is estimated that around 13.9 million tons of carbon black was consumed in 2019. In the past few years, there has been burgeoning demand for specialty carbon blacks. Currently, this segment is niche and accounts for around 8% of the total volume; however, these are products with higher realizations and margins command higher prices compared to commodity carbon black such as rubber carbon black and MRG.

Specialty carbon blacks are used as black pigmenting, conductive, and UV stabilizing agents to enhance material performances in paints, printing ink toners, plastics, batteries, wire & cables, sealant systems, and solid carbons. Specialty carbon blacks are used in negative electrode in lead-acid batteries and for both the electrodes in Li-ion batteries, thus improving conductivity, power performance, and life cycle of batteries.

Rubber carbon black is one of the most widely used grade and along with MGR accounted for more than 92% of the total carbon black market. Its cost-effectiveness makes it ideal for tire components such as sidewalls, treads, and inner liners. This type of carbon black is used to improve strength, durability, and processing of high-performance tires and other industrial rubber goods.

The automotive tire market is poised to register at a CAGR of 3.5% between 2021-2025 supported by strong demand from automotive production and adoption of high-performance and premium tires. The demand for carbon black in tire industry is also bolstered by rise in sales of tire replacements. Growth in radialization of tires and consumers demanding tire pressure monitoring systems into the vehicles will drive the tire replacement demand thus offering lucrative opportunities for the global carbon black market.

Tires to Spearhead Demand for Carbon Black

The tire industry is one of the major consumers of carbon black accounting for more than 70% of the global demand in 2019. Increasing disposable incomes in developing economies is anticipated to spur the growth of new vehicles, thus driving the demand for carbon black in the tire industry. Expanding economic activities is anticipated to soar vehicles miles traveled (VMT) per year, thus encouraging tire replacement rates. The demand for carbon black in the tire industry is likely to be driven by revival of significant growth in tire replacement market. Tire replacement accounts for more than 2/3rd of the total tire demand, especially in developed economies. Key factors such as increase in the middle-class population in industrialized countries is resulting in rise of vehicle ownerships, rapid changes in electric vehicles, and adoption to shared transportation, driverless technology are projected to drive the transportation industry, thus soaring the demand of carbon black in tire industry.

Industrial and mechanical rubber goods are also major applications of carbon black. These applications consume MGR as well as specialty carbon blacks. Carbon black is employed in mechanical rubber goods (conveyer belts, hoses, gaskets & seals), automotive rubber parts (anti-vibration parts, sealant systems, wiper blades, fascia), electronic packaging films, and shoe soles.  The carbon black market has also observed significant growth in niche applications such as printing inks, paints, plastics, wires & cables plastics, and consumer goods. These applications typically consume specialty carbon black, one of the fastest-growing product types in the carbon black market.

China Continues its Dominance in the Carbon Black Market   

Asia Pacific accounted for more than 60% of the demand for carbon black in 2019. The production cost is lowest in the region owing to availability low-priced feedstock and lower labor rates. The region has vast coal resources and hence distilled coal tar is the mostly widely feedstock, thus making the pricing economical compared to other regions. China accounts for more than 40% of the total carbon black production. In the past few years, a lot of investment in tire industry has been observed in India, Thailand, and Indonesia. Revival of the automotive industry, especially growth in passenger and light commercial vehicles, supported by economic recoveries in the region will boost the tire consumption, thus in turn lifting the demand for caron black.

Europe is anticipated to exhibit stable demand for both rubber and MGR carbon black. However, rising demand for conductive additives from paints, plastics, inks, and especially EV batteries will fuel the demand for high-value specialty carbon black. Specialty carbon black is likely to play vital role in EU’s ‘Smart and Sustainable Mobility Strategy’ of getting 30 million EVs by the end of this decade. Specialty carbon black is crucial to support an electronically conductive path in batteries and are critical to the performance of Li-ion batteries.

Companies Focusing on Cleaner, Renewable Sources to Produce Carbon Black    

The carbon black market is diversified with multinational companies such as Cabot Corporation, Birla Carbon, Orion Engineered Carbons, Jiangxi Black Cat Carbon, and Tokai Carbon Co., Ltd. battling out with players having strong regional influence. These companies are competing based on price, production performance, and quality of the product. In the past few years, companies have started focusing on technological advancements in the process and integrate cleaner, renewable sources to produce carbon black.

In 2021, Monolith Materials, announced new investments to support its growth plan in carbon black area. The company with its proprietary technology uses renewable energy to convert natural gas into carbon black. The company expect to reduce GHG emissions by as much as 1 million tons annually as compared to traditional production processes.

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