The global carbon black market is forecast to rise 4.0 percent per year through 2008 to 9.6 million metric tons, almost matching projected gains in global rubber consumption over the same period. The vast majority of carbon black finds use as a reinforcement in vulcanized rubber goods, including more than two-thirds for tires alone. Carbon black demand from the tire sector is projected to increase nearly 4 percent per year through 2008 to just over six million metric tons. The smaller non-tire rubber carbon black market will expand at a stronger 4.3 percent per year through 2008. These and other trends are presented in World Carbon Black, a new study from The Freedonia Group, Inc., a Cleveland-based industrial market research firm.

Special blacks will offer the strongest gains, although increasing from a relatively low base. While special blacks comprise less than nine percent of the overall carbon black market as measured in tonnage, they command considerably higher per-kilogram prices than commodity furnace blacks, and thus will continue to be the focus of research and development activity. In addition to higher margins, a strong position in special blacks offers suppliers greater protection from cyclicality in the highly interconnected rubber, tire and motor vehicle industries. Although demand for special blacks will remain concentrated in the plastics, inks and paints sectors, other uses such as conductive fillers will hold the best growth prospects through 2008.

The Asia/Pacific region, excluding Japan, will post the strongest gains in carbon black demand through 2008. The large markets of China and India will post particularly impressive gains due to a continuing rapid expansion in their respective motor vehicle and tire industries that will be driven by robust economic growth in both nations. China and India saw the largest increases in new carbon black capacity among all countries of the world over the 1998-2003 period -- a trend that should continue through 2008. Demand for carbon black in the developed parts of the world will continue to post below -average gains through 2008, with Japan holding the weakest prospects. Although the US market will register subpar gains through 2008, demand will recover significantly from the declines experienced during the 1998 -2003 period. Carbon black sales growth in Western Europe will also improve from the 1998-2003 period. In both Western Europe and North America, carbon black capacity utilization rates should increase through 2008 and exceed 90 percent, although neither region will approach the close to 100 percent capacity utilization rate in Japan.