Well-known companies disclose their performance, and Europe has skyrocketed? !
In 2024, Europe has become the target of factory closures for major tire companies. Tire giants such as Michelin and Goodyear have successively announced their decision to close some European factories. Many people think that the European tire industry should be in a "thigh tide" state, but contrary to the industry's expectations, factory closures have promoted the development of the European tire industry.
Carbon black giant European supply recovery
Cabot, a well-known carbon black supplier, recently announced its performance from October to December 2024, that is, the first quarter of fiscal year 2025. To everyone's surprise, Cabot's European sales performance was unusually strong under the "factory closure wave" in Europe. It has even become one of the important supports for profits. It can even be said that without the increase in production and sales driven by demand in Europe and Asia, Cabot's sales of carbon black for rubber reinforcement may have seen a more terrible decline.
From October to December 2024, Cabot's reinforcement materials division had sales of $611 million (RMB 4.453 billion), down only 4.6% year-on-year. More gratifyingly, Cabot's earnings in this division rose. In 2024, affected by the general decline in carbon black prices, many suppliers of related products were in a loss-making state. However, Cabot achieved a year-on-year increase in profits in the last quarter of 2024.
As of December 31, 2024, Cabot's quarterly earnings (earnings before interest, taxes, depreciation and amortization) increased slightly to $147 million (RMB 1.071 billion), compared with $146 million a year ago. Cabot attributed the increase in earnings to increased sales. In the last quarter of 2024, Cabot only saw a 1% sales decline in the Americas market. Demand in the Asia-Pacific region increased by 2% year-on-year, and in Europe, the Middle East and Africa increased by 1%; Cabot's global carbon black sales ushered in growth in the last quarter of 2024.
In addition, the sales growth, pricing and product portfolio advantages of its customer agreements in 2024 are all important reasons for Cabot's revenue growth. The revenue growth also boosted Cabot's overall performance. As for the increase in supply in the European market, Cabot explained that it was affected by the change in the overall carbon black supply pattern in Europe.
European carbon black demand reversed and increased
In 2024, the EU's sanctions on the supply of Russia and Belarus took full effect, and the European carbon black pattern changed dramatically. European tire factories began to turn to Cabot to meet carbon black demand-tire manufacturers are looking for additional supply.
In fact, most of the closed factories in Europe are factories with low operating efficiency, and the closure does not mean a complete withdrawal of production capacity. Tire giants have made a new layout of European production capacity, and part of the production capacity of the closed factories has been transferred to other factories in Europe and Asia.
This also reflects from the side that the changes in tire production in Europe are actually not as exaggerated as imagined. In 2024, the full production of Linglong's first phase project in Serbia, the trial operation of Nokian's Romanian plant, and the commissioning of Nexen's second phase plant in the Czech Republic will bring more orders for Cabot's European rubber carbon black.
However, Cabot suffered a decline in sales in the United States from October to December. Cabot CEO and President Sean Keohane also said in a conference call that production in the Americas is facing challenges. On the one hand, a large number of Asian tires have poured into North and South America, which has had a certain impact on local factory sales and dragged down carbon black demand; on the other hand, exchange rate fluctuations are affecting the operation of South American factories. "In North America, our contract volume is basically the same as last year, but we do see a decrease in South American contracts.
" It is worth noting that perhaps South American tire factories will encounter more difficult situations in 2025. It is reported that Bridgestone is restructuring its Latin American business, and some of its production capacity in Argentina and Brazil is likely to be optimized.
And Sumitomo Rubber also announced the closure of its US factory at the end of 2024. However, Zhongce and Sailun have deployed production capacity in Mexico in North America in 2024, and some Chinese tire companies are planning to deploy production capacity in North America. With both decreases and increases, American tire manufacturing is a mystery, and carbon black demand is also a mystery.
Overall optimism in 2025
When it comes to sales and revenue in the first quarter of 2025, Cabot is more optimistic. Although there may be a decline in orders in Asia due to the long holiday, the overall tire production capacity in Asia is in a state of increasing volume.
Therefore, Cabot remains optimistic about its full-year sales in Asia in 2025. And sales in Europe are also on an upward trend at present, so Cabot believes that with the increase in global carbon black demand, Cabot's 2025 is worth looking forward to.
