To boost market position Degussa-Hüls wants to invest Euro 80 million to expand the production of precipitated silicas at its factory in Wesseling/Germany. Silicas, along with rubber silanes and rubber carbon black, are important components in reducing the rolling resistance of tyres.
There are rumours in the market that the industry will raise tyre prices – maybe even this week – to cover increases in raw materials (rubber, oil, carbon black). As production capacities have been expanded during the last 24 months, it is doubted whether any increase will stick due to market pressure.
Following a few months of indifferent performance, stock market analysts are meanwhile promoting tyre manufacturers’ shares as a good buy. The reasons for this optimism are that the rise in prices of raw materials (rubber, oil, carbon black) appears to have stopped, or at least slowed down, and that price increases announced in the USA are holding.
The German Rubber Association W.d.K. (Wirtschaftsverband der deutschen Kautschukindustrie) has announced that total sales of rubber goods increased 4.4 per cent in the first quarter of 2000. Sales of technical products rose 5.8 % and tyre sales increased 3.3 %. However, the W.d.K. continues to worry about increasing material costs (rubber, oil, carbon black).
After Goodyear gave a profit warning for the second quarter its share prices fell yesterday by 10% to US$22.5; in June 1999 the price was US$58.7. The increase in raw material costs (rubber, oil, carbon black), the failure of securing better prices and extremely competitive prices in the UK and Germany, as well as the weak Euro against the dollar are the main reasons. US economy magazines yesterday wrote about the necessity for Goodyear “to make immediate drastic moves over there (meaning Europe).
Titan Technologies, Albuquerque/USA (not to be mistaken for Titan Tire) has announced progress in tyre recycling technology (process low-temperature pyrolysis). Besides good quality oil and scrap steel, significant quantities of carbon black for re-use in manufacturing tyres is generated.
Degussa-Hüls AG, the world’s second largest carbon black manufacturer, with production sites in Europe, North America, Africa and Asia, has agian announced a price increase of 50 Euro per metric ton for its range of rubber blacks, effective from September 1st, 2000, in Europe. A continuing combination of the weakness of the Euro and unprecedented high prices for crude oil and crude oil products is leading to substantially higher carbon black production costs.
Unprecedented crude oil and crude oil products have pushed production costs for carbon black ever higher.This, combined with the low value of the Euro have again led Degussa-Hüls AG to raise prices for rubber blacks to 40 Euro per metric ton. Prices effective from 15th November.
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