Weak demand in the tyre and mechanical rubber goods (MRG) industries has diminished business by worldwide supplier of specialty and high-performance carbon black, Orion Engineered Carbons (Orion). The company’s net sales decreased 19.8% year-on-year to US$207.7 million in the last three months of 2019, due to “the pass through of lower feedstock costs to customers.” Its rubber black volumes also decreased by 9.6% or 18.7 kilotonnes, compared to the fourth quarter 2018, due to low demand in South Korea, China and Europe, and continued MRG weakness and general/administrative expenses.
Orion, however,said it has achieved “meaningful rubber price increases” for the year 2020, such that will further de-risk business by reducing earnings volatility in the years ahead, according to CEO Corning Painter.
“In 2019 we adopted a leaner management structure, renewed our revolver at more attractive rates and achieved price increases in our rubber carbon black segment; during the [fourth] quarter we successfully installed surcharge mechanisms to better recover raw material costs across the majority of our 2020 Rubber contracted volumes,” said Painter.