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EU and US anti-trust agencies join forces to investigate alleged carbon black cartel
F O C US just over 4 M tonnes – much better than the 3.75 M tonnes of 2001. However, in truth there has been only a slight advance on the consumption figure recorded for 2000. The longterm trend, according to DuPont, indicates 2.7-2.8% per annum growth over the 1965-2002 period. Projecting this trend ahead means that world TiO2 consumption should pass the 5 M tonnes/y mark in 2007/08. However, DuPont believes that demand growth will be slightly below the trendline rate in 2003 and in 2004. Average capacity utilisation at TiO2 plants around the world fell to 85-86% in 2001, demand dropped by about 5% and the TiO2 pigment manufacturers’ inventories increased quite steeply. Against that sort of background, it is hardly surprising that realised selling prices for TiO2 pigment fell in all market regions. Mr Edwards noted that prices prevailing for most of 2002 were 10% below the levels attained in 2000. And even in 2000 TiO2 pigment prices were at unsatisfactory levels. Mr Keefer pointed out that mainly because of low prices during the past decade, the TiO2 pigment industry has not been able to cover the cost of capital already invested in the business, let alone achieve price and profitability levels that would encourage serious reinvestment! Mr Young added: “When pigment prices fall, they usually fall quite steeply, over a relatively short time-frame. But to get them back up again is a lengthy process, because we give customers advance notification of posted price increases and then there is a 30-90 day moratorium to allow them to adapt to the new price levels. During that time, there are risks that the supply/demand balance may appear to shift or competitors may appear to make more attractive special deals.” DuPont posted two price rises in Europe this year, amounting to €0.35 per kilo in total, but the actually achieved increase was probably only €0.25 per kilo. This has brought average prices back to about €2.202.40 per kilo. Another rise – posted as 7%, due to take effect as from 15 January 2003, should bring prices up to €2.35-2.55 per kilo. This was the sort of price range that prevailed in December 2000. The movement in exchange rates has naturally been helpful to DuPont: in December 2000,
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the Euro was worth only 93 US cents and it fell below 85 US cents in May/June 2001, whereas during 4Q 2002 the two currencies have been more or less at parity. This means that the current European price translates to about $2200-2400 per tonne. Mr Keefer confirmed that right now TiO2 pigment prices in the three major marketing regions – North America, Western Europe and Asia/Pacific – are “within shouting distance of each other.” In the course of his presentation, Mr Edwards displayed a set of charts comparing US prices for architectural paints and selected paper products against TiO2 pigment prices over the 1992-2002 period. The trendline for TiO2 pigment prices was consistently the lowest. The key message is: “While recognising that TiO2 continues to represent a large portion of our customers’ costs, the TiO2 pigment price is not rising in real terms and TiO2 pigment is becoming ever more affordable.” Reg Adams
MARKETS Prices raised on Ropaque hollowsphere pigment RohmNova (a joint venture between Rohm & Haas and Omnova) has announced a price increase for its synthetic hollow-sphere Ropaque pigments sold to papermakers in North America. The price increase is $0.02 per pound and it is due to come into effect on 1 January 2003. Earlier this year, Dow posted a $0.03 per pound price rise in its prices for solid plastic pigments sold to North American papermakers. (See ‘Focus on Pigments’, Aug 2002, 2) Chemical Week, 20-27 Nov 2002, 164 (46), 45
EU and US anti-trust agencies join forces to investigate alleged carbon black cartel In mid-November, the US and EU anti-trust authorities embarked on a joint investigation into alleged pricefixing and other restrictive trade practices characteristic of a cartel in the carbon black industry. News of the investigation began with a series of
“surprise visits” by anti-trust officers to the offices of major producers. On Tuesday 19 November, Cabot – the world’s largest producer of carbon black – revealed that the EU anti-trust authority was “reviewing documents” at Cabot’s European headquarters in Suresnes (France) and that the US authority “had contacted the company’s global headquarters in Boston.” On the following day, Columbian Chemicals (a subsidiary of Phelps Dodge) revealed that the EU authorities were “reviewing documents” at several Columbian sites in Europe and that the US authority “had contacted Columbian’s global headquarters in Marietta, GA.” Both Cabot and Columbian emphasised that “no charges of wrongdoing had been filed against their companies or any of their employees.” The German business press reported that Degussa’s head office in Frankfurt was “searched for incriminating documents” by investigators from the European Commission on Thursday 21 November. By this time, the European Commission had confirmed that it was investigating the activities of six major carbon black suppliers to European markets, but it did not name the six suppliers. It also confirmed that in the context of these investigations officers from the EU anti-trust authority had visited company offices in France, Germany, Italy and Spain. Amplifying on this news, ‘CMR’ listed the main carbon black producers in Western Europe, with their respective current capacities shown in brackets: Degussa AG (553,000 tonnes/y); Cabot (500,000 tonnes/y); Columbian (311,000 tonnes/y). It also listed the main producers in North America as: Cabot (658,000 tonnes/y), Columbian Chemicals (495,000 tonnes/y), Continental Carbon (304,000 tonnes/y), Degussa Engineered Carbons (510,000 tonnes/y), and Sid Richardson (363,000 tonnes/y). ‘CMR’ also noted that the main sources of imports into the EU are: Egypt (80,000-100,000 tonnes/y) and Russia (70,000-90,000 tonnes/y). On 12 November 2001, CEFIC (the European chemical manufacturers’ association) officially filed a complaint with the European Commission alleging that carbon black from
DECEMBER 2002
F O C U S Egyptian and Russian suppliers was being dumped (sold at less than fair value) in EU markets. The major EU suppliers – Degussa, Cabot and Columbian – claimed that Russian and Egyptian suppliers had been selling carbon black in EU markets at prices that were as much as 30% below normal prevailing EU prices. An investigation into the dumping complaint was launched by the European Commission, with notification that it should be completed by the end of February 2003. ‘ECN’ indicates that it may not be difficult to show that there is often collusion between carbon black suppliers on posting price increases. For example, in April 2002 Cabot and Sevalco (the UK subsidiary of Columbian) both announced 12% price rises, the announcements coming within the same week. A major customer was reported as saying that the scale and widespread nature of the price increase had prompted him to turn to lower priced Egyptian carbon black. Handelsblatt Wirtschafts- und Finanzzeitung, 22 Nov 2002, 47 (226), 13 (in German) & Chemical Market Reporter, 25 Nov 2002 (Website: http://www.chemicalmarketreporter.com) & European Chemical News, 2 Dec 2002, 77 (2032), 7
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The plant is located at Beerse and it is due to start-up before the end of this year. Plastics and Rubber Weekly, 1 Nov 2002, 3
China: Columbian – carbon black Columbian Chemicals (part of the USbased Phelps Dodge group) is currently studying the feasibility of building a 100,000 tonnes/y carbon black plant in Quangang Petrochemical City. Part of the study probably involves assessing potential local partners for a joint venture project. Asian Chemical News, 4 Nov 2002, 9 (378), 25
China: Dezhou Hongqiao – aniline Dezhou Hongqiao Dyestuff Chemical Co Ltd is one of China’s most important producers of organic dyes and pigments, with a total capacity in excess of 15,000 tonnes/y. The company’s plant is located at Dezhou in the province of Shandong. A new unit was recently added here for the production of 1000 tonnes/y of N,N’dimethyl aniline. China Chemical Reporter, 16 Oct 2002, 13 (29), 23
China: Jiangsu Zhongdan – indigo
PLANTS Australia: Minerals Corp Ltd – kaolin Minerals Corp Ltd is confident that its Skardon River kaolin project in Queensland will reach break-even point by 4Q 2003. The company bought the mining property and associated assets for A$6.5 M and has so far spent A$20 M on bringing the mine into production. Sales are building up steadily. In January 2003, the company is budgeting for kaolin sales of 500 tonnes per month, rising to 2500 tonnes/month by September 2002. Industrial Minerals, Nov 2002, 11
Belgium: Ravago & Megides – masterbatch Ravago and Megides (of Israel) have established a joint venture company – MBSolutions – to run a new plant for making colour plastic masterbatches.
DECEMBER 2002
Jiangsu Zhongdan is nearing completion of its eighth production line at the Jiangsu indigo colorants plant. The latest addition, costing about $2 M, brings total indigo colorants capacity here up to 15,000 tonnes/y. At the time of an earlier expansion (see ‘Focus on Pigments’, Jul 1995, 3), the plant operating company was referred to as Jiangsu Taixing Chemical Works and its indigo plant was described as the largest in Asia. APCJ, Asia Pacific Coatings Journal, Oct 2002, 15 (5), 6
China: Puyang Guangpu – precipitated silica or carbon black It was recently reported in ‘Chemical Week’ that Puyang Guangpu was planning to increase its carbon black capacity at Puyang (Henan province) from 5000 tonnes/y to 40,000 tonnes/y. Now ‘ACN’ has reported that Puyang Guangpu is already working
on a Yuan 80 M project to build a new 40,000 tonnes/y precipitated silica plant to replace an existing 5000 tonnes/y unit. The new plant is due to come into production at the Puyang site (Henan province) towards the end of 2003. It is not clear whether the two projects are in fact the same! “Precipitated silica” is sometimes referred to as “white carbon black” by Chinese news agencies. Asian Chemical News, 4 Nov 2002, 9 (378), 24
Finland: Omya – GCC Omya (of Oftringen, Switzerland) has acquired title to a calcite deposit at Hyypiamäki, only 40 km away from the company’s existing 250,000 tonnes/y ground calcium carbonate (GCC) operation at Forby. An extensive drilling programme indicates a calcite resource of about 4-5 M tonnes of good quality, suitable for feeding to the Forby GCC plant. Test mining will begin in early 2003. Linked to the availability of this new resource, Omya plans to expand GCC capacity at Forby to 400,000-450,000 tonnes/y. Suomen Karbonaatti, a joint venture in which Omya holds a 49% stake, is also expanding its GCC capacity: it is spending about €17 M to raise GCC capacity here to 700,000 tonnes/y, with completion scheduled for March 2003. Industrial Minerals, Nov 2002, 11
Germany: Albemarle/Martinswerk – alumina trihydrate For some time, Alcan had rivalled Martinswerk (formerly part of the Alusuisse Lonza group) as the largest supplier of alumina trihydrate to European markets. In early 2001, Alcan declared that it intended to acquire Alusuisse, primarily in order to increase its aluminium metal capacity. One of the conditions for approval of this takeover was the requirement that the combined entity must divest its Martinswerk business. The European Commission noted that the takeover would lead to the creation of dominant positions in the EU markets for alumina trihydrate (ATH), lithographic sheet and semi-rigid containers. In respect of ATH, the combined market share was estimated at 65-70%. So, towards the end of April 2001,
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the Euro was worth only 93 US cents and it fell below 85 US cents in May/June 2001, whereas during 4Q 2002 the two currencies have been more or less at parity. This means that the current European price translates to about $2200-2400 per tonne. Mr Keefer confirmed that right now TiO2 pigment prices in the three major marketing regions – North America, Western Europe and Asia/Pacific – are “within shouting distance of each other.” In the course of his presentation, Mr Edwards displayed a set of charts comparing US prices for architectural paints and selected paper products against TiO2 pigment prices over the 1992-2002 period. The trendline for TiO2 pigment prices was consistently the lowest. The key message is: “While recognising that TiO2 continues to represent a large portion of our customers’ costs, the TiO2 pigment price is not rising in real terms and TiO2 pigment is becoming ever more affordable.” Reg Adams
MARKETS Prices raised on Ropaque hollowsphere pigment RohmNova (a joint venture between Rohm & Haas and Omnova) has announced a price increase for its synthetic hollow-sphere Ropaque pigments sold to papermakers in North America. The price increase is $0.02 per pound and it is due to come into effect on 1 January 2003. Earlier this year, Dow posted a $0.03 per pound price rise in its prices for solid plastic pigments sold to North American papermakers. (See ‘Focus on Pigments’, Aug 2002, 2) Chemical Week, 20-27 Nov 2002, 164 (46), 45
EU and US anti-trust agencies join forces to investigate alleged carbon black cartel In mid-November, the US and EU anti-trust authorities embarked on a joint investigation into alleged pricefixing and other restrictive trade practices characteristic of a cartel in the carbon black industry. News of the investigation began with a series of
“surprise visits” by anti-trust officers to the offices of major producers. On Tuesday 19 November, Cabot – the world’s largest producer of carbon black – revealed that the EU anti-trust authority was “reviewing documents” at Cabot’s European headquarters in Suresnes (France) and that the US authority “had contacted the company’s global headquarters in Boston.” On the following day, Columbian Chemicals (a subsidiary of Phelps Dodge) revealed that the EU authorities were “reviewing documents” at several Columbian sites in Europe and that the US authority “had contacted Columbian’s global headquarters in Marietta, GA.” Both Cabot and Columbian emphasised that “no charges of wrongdoing had been filed against their companies or any of their employees.” The German business press reported that Degussa’s head office in Frankfurt was “searched for incriminating documents” by investigators from the European Commission on Thursday 21 November. By this time, the European Commission had confirmed that it was investigating the activities of six major carbon black suppliers to European markets, but it did not name the six suppliers. It also confirmed that in the context of these investigations officers from the EU anti-trust authority had visited company offices in France, Germany, Italy and Spain. Amplifying on this news, ‘CMR’ listed the main carbon black producers in Western Europe, with their respective current capacities shown in brackets: Degussa AG (553,000 tonnes/y); Cabot (500,000 tonnes/y); Columbian (311,000 tonnes/y). It also listed the main producers in North America as: Cabot (658,000 tonnes/y), Columbian Chemicals (495,000 tonnes/y), Continental Carbon (304,000 tonnes/y), Degussa Engineered Carbons (510,000 tonnes/y), and Sid Richardson (363,000 tonnes/y). ‘CMR’ also noted that the main sources of imports into the EU are: Egypt (80,000-100,000 tonnes/y) and Russia (70,000-90,000 tonnes/y). On 12 November 2001, CEFIC (the European chemical manufacturers’ association) officially filed a complaint with the European Commission alleging that carbon black from
DECEMBER 2002
F O C U S Egyptian and Russian suppliers was being dumped (sold at less than fair value) in EU markets. The major EU suppliers – Degussa, Cabot and Columbian – claimed that Russian and Egyptian suppliers had been selling carbon black in EU markets at prices that were as much as 30% below normal prevailing EU prices. An investigation into the dumping complaint was launched by the European Commission, with notification that it should be completed by the end of February 2003. ‘ECN’ indicates that it may not be difficult to show that there is often collusion between carbon black suppliers on posting price increases. For example, in April 2002 Cabot and Sevalco (the UK subsidiary of Columbian) both announced 12% price rises, the announcements coming within the same week. A major customer was reported as saying that the scale and widespread nature of the price increase had prompted him to turn to lower priced Egyptian carbon black. Handelsblatt Wirtschafts- und Finanzzeitung, 22 Nov 2002, 47 (226), 13 (in German) & Chemical Market Reporter, 25 Nov 2002 (Website: http://www.chemicalmarketreporter.com) & European Chemical News, 2 Dec 2002, 77 (2032), 7
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PIGMENTS
The plant is located at Beerse and it is due to start-up before the end of this year. Plastics and Rubber Weekly, 1 Nov 2002, 3
China: Columbian – carbon black Columbian Chemicals (part of the USbased Phelps Dodge group) is currently studying the feasibility of building a 100,000 tonnes/y carbon black plant in Quangang Petrochemical City. Part of the study probably involves assessing potential local partners for a joint venture project. Asian Chemical News, 4 Nov 2002, 9 (378), 25
China: Dezhou Hongqiao – aniline Dezhou Hongqiao Dyestuff Chemical Co Ltd is one of China’s most important producers of organic dyes and pigments, with a total capacity in excess of 15,000 tonnes/y. The company’s plant is located at Dezhou in the province of Shandong. A new unit was recently added here for the production of 1000 tonnes/y of N,N’dimethyl aniline. China Chemical Reporter, 16 Oct 2002, 13 (29), 23
China: Jiangsu Zhongdan – indigo
PLANTS Australia: Minerals Corp Ltd – kaolin Minerals Corp Ltd is confident that its Skardon River kaolin project in Queensland will reach break-even point by 4Q 2003. The company bought the mining property and associated assets for A$6.5 M and has so far spent A$20 M on bringing the mine into production. Sales are building up steadily. In January 2003, the company is budgeting for kaolin sales of 500 tonnes per month, rising to 2500 tonnes/month by September 2002. Industrial Minerals, Nov 2002, 11
Belgium: Ravago & Megides – masterbatch Ravago and Megides (of Israel) have established a joint venture company – MBSolutions – to run a new plant for making colour plastic masterbatches.
DECEMBER 2002
Jiangsu Zhongdan is nearing completion of its eighth production line at the Jiangsu indigo colorants plant. The latest addition, costing about $2 M, brings total indigo colorants capacity here up to 15,000 tonnes/y. At the time of an earlier expansion (see ‘Focus on Pigments’, Jul 1995, 3), the plant operating company was referred to as Jiangsu Taixing Chemical Works and its indigo plant was described as the largest in Asia. APCJ, Asia Pacific Coatings Journal, Oct 2002, 15 (5), 6
China: Puyang Guangpu – precipitated silica or carbon black It was recently reported in ‘Chemical Week’ that Puyang Guangpu was planning to increase its carbon black capacity at Puyang (Henan province) from 5000 tonnes/y to 40,000 tonnes/y. Now ‘ACN’ has reported that Puyang Guangpu is already working
on a Yuan 80 M project to build a new 40,000 tonnes/y precipitated silica plant to replace an existing 5000 tonnes/y unit. The new plant is due to come into production at the Puyang site (Henan province) towards the end of 2003. It is not clear whether the two projects are in fact the same! “Precipitated silica” is sometimes referred to as “white carbon black” by Chinese news agencies. Asian Chemical News, 4 Nov 2002, 9 (378), 24
Finland: Omya – GCC Omya (of Oftringen, Switzerland) has acquired title to a calcite deposit at Hyypiamäki, only 40 km away from the company’s existing 250,000 tonnes/y ground calcium carbonate (GCC) operation at Forby. An extensive drilling programme indicates a calcite resource of about 4-5 M tonnes of good quality, suitable for feeding to the Forby GCC plant. Test mining will begin in early 2003. Linked to the availability of this new resource, Omya plans to expand GCC capacity at Forby to 400,000-450,000 tonnes/y. Suomen Karbonaatti, a joint venture in which Omya holds a 49% stake, is also expanding its GCC capacity: it is spending about €17 M to raise GCC capacity here to 700,000 tonnes/y, with completion scheduled for March 2003. Industrial Minerals, Nov 2002, 11
Germany: Albemarle/Martinswerk – alumina trihydrate For some time, Alcan had rivalled Martinswerk (formerly part of the Alusuisse Lonza group) as the largest supplier of alumina trihydrate to European markets. In early 2001, Alcan declared that it intended to acquire Alusuisse, primarily in order to increase its aluminium metal capacity. One of the conditions for approval of this takeover was the requirement that the combined entity must divest its Martinswerk business. The European Commission noted that the takeover would lead to the creation of dominant positions in the EU markets for alumina trihydrate (ATH), lithographic sheet and semi-rigid containers. In respect of ATH, the combined market share was estimated at 65-70%. So, towards the end of April 2001,
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