Prices rise with demand
By Staff -- Purchasing, 5/7/1998
Strong demand is putting upward pressure on carbon black prices. Buyers forecast domestic tags will jump 2(cent)-3(cent)/lb through the third quarter, according to respondents to Purchasing's monthly chemical transaction price survey. The strong market is attributed to the upbeat domestic economy, which is fueling tire use and sales.In the first half of 1997, U.S. bulk contracts for carbon black remained steady at an average of 33(cent)/lb. This price dipped to 32(cent)/lb in the second half of last year. In the first quarter of this year, contracts climbed back to 33(cent)/lb.
Spot market prices averaged 37(cent)/lb in the first half of 1997. In the third quarter, these tags inched up to 38(cent)/lb and remained at that level through the first quarter of this year.
Longer term, worldwide carbon black consumption is forecast to increase 3%/yr to 7.8 million metric tons through 2001, according to a new study by The Freedonia Group, Inc., a market research firm based in Cleveland, Ohio. Vulcanized rubber goods account for 94% of total demand. This includes 68% for tire production. Other vulcanized rubber goods include hoses, belts, and mechanical goods.
Despite the financial crisis that hit the Pacific Rim in late 1997, carbon black demand will grow fastest in Aisa, according to the Freedonia study. Consumption in North America will grow at an average of 2.3%/yr while Japan and Western Europe will see an increase of less than 2%/yr.
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