Carbon black market players forecast strong end of 2026, despite ongoing challenges

Executives from companies involved in the US carbon black market shared expectations of stronger market performance by the end of 2026, driven by increased end-consumer demand and the localization of purchases due to logistical disruptions and the current tariff environment.

Market participants were confident that management of feedstock procurement, operational efficiency and improved cost passthrough strategies, as well as a shift to more localized procurement chains, could allow companies to leverage expected higher demand to strengthen results in the short term, despite challenges in raw material procurement and feedstock costs, mostly related to the war in the Middle East.

Naoki Hirai, accounting and finance executive officer at Japan-based Tokai Carbon Co., Ltd. said operations at key end-users in sectors like tires and automotive have "exited the worst phase and are on a recovery trend."

Hirai said in Tokai's Aug. 6 earnings call that the company has revised its full-year salesforecast upward from May, due to strengthening conditions.

Tokai's CEO Hajime Nagasaka said the company expects carbon black sales and profits to surpass initial forecasts at the start of the year. Other competitors were also looking at moving their pricing further in order to adjust margins in response to incomplete feedstock cost adjustments.

"With oil volatility right now, it remains a top priority to manage"pricing and costs surges, Sean Keohane, CEO of US-based carbon black producer Cabot Corporation, said during the company's latest earnings call on Aug. 4.

Keohane said the company's sales team was able to negotiate some cost pass-throughs over their third fiscal quarter, but that some are still pending.

Nevertheless, "we would expect margins to normalize in the fourth [fiscal] quarter as the higher raw costs from higher oil prices" catch up with their quotations to customers, Keohane said.

Competition and Middle East disruptions also remain top of mind for companies participating in the carbon black market.

CEO of US-based The Goodyear Tire and Rubber Company, Mark Stewart said "a competitive marketplace, combined with soft consumer backdrop" remains a challenge for the Americas.

However, destocking had eased, allowing the company to increase salesvolumes, Stewart said on Goodyear's Aug. 6 call.

Goodyear remains focused on incomplete raw material costs and refinery economics pass-throughs, which remain closely tied to disruptions from the Middle East war and geopolitical uncertainty, interim CFO Scott Deakin said.

However, Deakin said the company has been "encouraged by the dynamics coming out of the Middle East, as any stabilization there flowing quickly through to oil."

Cabot's CEO Keohane pointed to oil volatility as a top priority going into the year-end.

"As we move forward, we would expect margins to normalize in the fourth quarter as the higher raw material cost pass-through catches up."

Most of the companies pointed to long-term strength from supply disruptions and tariffs, as the new market dynamics have pushed carbon black and tire sectors towards more localized strategies. This would translate to business models focused on reducing dependence on imports and on building business relationships and trust with suppliers and clients in the same country or region.

"Local for local is a smart, low-risk sourcing strategy," Corning Painter,CEO of Luxembourg-based carbon black producer Orion S.A., said during the company's earnings call on Aug. 6. "As import levels and channel inventories continue to normalize, locally made tire sell-in should improve, foreshadowing higher local tire production rates, a positive for Orion."

Exports of carbon black and tires from Asia have steadily become the cheapest option for several automakers and purchasers of replacement tires, but recent tariffs and geopolitical trade disruptions have pushed some buyers to reconsider long supply chains and rather shift toward more regional options despite increased costs.

Carbon black is a key chemical component used mainly for tire production, with other uses in coatings and electronics sectors through an array of specialty grades. Prices for the commodity have fluctuated in 2026, as its key feedstock -- carbon black oil -- is closely related to the crude oil complex.

Platts, part of S&P Global Energy, last assessed N550 carbon black at 76 cents/pound ex-works USGC on Aug. 7, down 4 cents/lb from the week prior, 9 cents/lb below its year-to-date high of 85 cents/lb on May 1, and 12 cents/lb above Jan. 9 levels, the first assessment of the year.

Producers' bullish outlook was not limited to 2026. Tokai has not yet started to compile a forecast for 2027 performance, but CEO Nagasaka said "it's fair to say that it should definitely be an uptrend."