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Cabot Awaits an Addition of $80m in Their Carbon Black Revenue for the Next Year

Cabot Awaits an Addition of $80m in Their Carbon Black Revenue for the Next Year

Cabot Awaits an Addition of $80m in Their Carbon Black Revenue for the Next Year

  • 10-Nov-2022 5:13 PM
  • Journalist: Timothy Greene

Texas, USA: The globally renowned Carbon Black manufacturing company Cabot Corp. has been expecting an extra gain of $80m in Carbon Black revenues in the next year, backed by incremented price settlements in their 2023 tire customer agreements. In tire agreements, they secured price and product mix improvements that, according to Sean Keohane, president, and CEO, will result in price increases of $35 million every quarter for Carbon Black. He added that the amount would be netted by roughly $15 million to $20 million every quarter because of the impact of currency conversions and increased cost-base inflation.

During the fourth quarter earnings call, Keohane stated, "And at this time, we have struck an agreement with essentially all of our big clients." "This is unquestionably sooner than the average year. Additionally, in a competitive market, I believe it indicates our clients' willingness to ensure supplies," he continued. The Cabot CEO claims that supply security has been the fundamental reason for most clients to come to an early arrangement, particularly following Russia's invasion of Ukraine. Overall, he concluded that Cabot and their customers would be significantly benefited from the outcome of the agreements with customers.

Cabot had a successful fiscal year in 2022, with total revenue jumping 26% to $4.3 billion. The division for reinforcement materials, which produces Carbon Black for the rubber and tire industries, among other things, recorded a 62% increase in fourth-quarter EBIT (profits) to $109 million. Cabot attributed the rise in profits to better unit margins brought about by increased price and volume of Carbon Black across all areas.

As per ChemAnalyst anticipations, "The Carbon Black Market would showcase a bullish market sentiment across the globe with the recent advancement in demand from tire and automotive industries. The surging gas prices would be another crucial factor supporting Carbon Black price hike in the upcoming years."

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