Specialty Carbon Black Market

The prime factor driving the growth of the global specialty carbon black market is the widening application of specialty carbon black in polymer manufacturing. The increasing demand for printing inks across various end-use industries and the growing demand in the paints and coatings industry is the growth drivers. Moreover, the expanding construction industry in both emerging and developed economies is expected to provide lucrative growth opportunities to players operating in the global market during the forecast period. However, the stringent environmental regulations related to the restriction on the use of additives in plastics and food contact materials may hamper the growth of the global specialty carbon black in the future.

Specialty carbon black finds extensive use in the polymer manufacturing process to impart functionalities such as UV protection and conductive characteristics. The polymer manufactured using specialty carbon black is used in wires & cables, electronics, conductive packaging, film and sheet, fibers, moldings, and pipes.

In molded plastic parts, (both injection or blow-molded parts) used in the consumer, industrial and automotive markets, specialty carbon black imparts long-lasting color, opacity, and surface smoothness to ensure aesthetic quality and maintain the mechanical properties of the part. Specialty carbon black is highly used in wires & cables as it provides critical performance in semi-conductive shields. The semi-conductive compound acts as a shield to smoothen sharp edges on the conductor surface and eliminate the electrical field stress by homogenizing the electrical field around the conductor. Ultraviolet (UV) protection characteristics can be embedded in the plastics by the addition of specialty carbon black. These plastics are then used for cable jacketing and telecommunication cables to protect them from mechanical shocks, chemicals, oils, and exposure to weathering. Due to the UV-protection capabilities imparted by specialty carbon black, it is also utilized in the manufacturing of plastic pipes. The conductive or electrostatic dissipative (ESD) performance of specialty carbon black in plastics increases its usage in various end-use industries. Conductive plastics offer protection against premature failure or damage due to electrostatic discharge in a variety of applications such as automotive fuel systems, electronic and electrical packaging, and equipment viz. IC carrier tapes, ESD films, IC thermoformed trays, ESD corrugated boards, IC rigid trays, ESD boxes, containers, fiber/slit tape, conveying, industrial & consumer, conductive moldings, and other plastic applications. In the fiber and textile industries, specialty carbon black offers exceptional color performance, physical cleanliness, and filterability. Furthermore, specialty carbon black offers surface smoothness, opacity, and dispersibility performance in a wide range of films and sheets viz. packaging and lamination films, agricultural mulch, and silage films, geosynthetics and geomembranes, and general-purpose films and sheets.

Thus, to impart superior functionalities in polymer chemistries and various end-use industries such as electronics, automotive, etc. the demand for specialty carbon is increasing at a significant rate and is expected to drive the growth of the global market during the forecast period.

A wide range of carbon black-based products is used in the construction industry such as paints and coatings, adhesives & sealants, batteries, plastics, and foaming agents, among others. The industry has witnessed healthy growth in the recent past and is expected to flourish during the assessment period, especially in the developing counties of Asia-Pacific and the Middle East.

The rising residential and commercial construction, especially in India and China, due to the growing population, increasing urban population, demand for single-family dwellings, increasing government and private-sector investments, rising per-capita incomes, growing consumer spending, and improving standards of living, and improving economy are driving the growth of the construction industry in the region. The government has eased norms for foreign direct investment in the real estate sector. For instance, in India, the introduction of the goods and services tax also eases tax-related complications in the real estate industry and the “Make in India” campaign has directed huge foreign investment in the real estate and infrastructure sectors. The real estate sector of Vietnam is also growing as a result of the implementation of the housing law as well as the law on the real estate business. Moreover, the increasing renovation and repair activities in the country are expected to surge the demand for plastics, paints & coatings, and adhesives & sealants which will create numerous opportunities for the global specialty carbon black market across Asia-Pacific and the rest of the world.

Additionally, the government in the Middle East & Africa is developing infrastructure to boost the tourism industry. Various projects for the development of infrastructure have been taken up by the Middle East government including the Smart City project, Dubai Expo 2020, Lusail City project, and Qatar’s FIFA World Cup 2022, which are expected to drive the demand for conductive plastics, paints & coatings, adhesives & sealants, and others during the forecast period. The GCC and Turkey are the major growth-centric markets for specialty carbon black in the region.

According to Statista, the size of the global construction market is expected to reach USD 10.3 trillion by 2025 from USD 6.4 trillion in 2020, which is likely to boost the construction industry in the forecast period which in turn creates lucrative growth opportunities for players operating in the global specialty carbon black market during the forecast period.

Several stringent regulations are imposed across the globe that restricts the use of additives in manufacturing plastic materials and products intended for use in the food industry. The renowned regulatory bodies that have imposed the laws are the US FDA, the European Commission, and various regulatory bodies in South America, Switzerland, Japan, and China. These regulatory bodies also have imposed permissible limits for polycyclic aromatic hydrocarbons (PAHs), benzo(a)pyrene, toluene, and cyclohexane. PAHs are an alarming group of substances for humans and environmental organisms. Benzo[a]pyrene is one of the 17 types of PAH, which is highly toxic and hazardous to human health and the environment.

US FDA regulations

The applicable purity requirements for compliance with the US FDA regulations are:

Total PAHs not to exceed 0.5 ppmBenzo(a)pyrene not to exceed 5.0 ppb

The US FDA has recently updated 21 CFR 178.3297 which removes the previous 2.5% weight loading limit for high-purity specialty carbon blacks into plastics. The newly updated law allows the use of specialty carbon black up to the loading needed to accomplish the intended technical effect. Moreover, it underlined to restrict the use of those plastics in contact with infant formula and human milk.

European Union

The EU Plastics Regulation by the European Union have set the following purity requirements and specifications:

Toluene extract ≤ 0.1%Cyclohexane extinction at 386 nm < 0.02 for 1 cm cell or < 0.1 for 5 cm cellBenzo(a)pyrene ≤ 0.25 mg/kg (250 ppb)Primary particles of 10–300nm, aggregates of 100–1200nm, agglomerates 300nm+In the final food contact items, a maximum of 2.5% carbon black by weight is allowed

Mercosur (South America)

Mercosur has adopted the following purity and specification requirements:

Toluene extract ≤ 0.1%Cyclohexane extinction at 386 nm < 0.02 for 1 cm cell or < 0.1 for 5 cm cellBenzo(a)pyrene ≤ 0.25 mg/kg (250 ppb)In the final food contact item, a maximum of 2.5% carbon black by weight is allowed

Switzerland

Switzerland has adopted the following purity and specification requirements:

Toluene extract ≤ 0.1%Cyclohexane extinction at 386 nm < 0.02 for 1 cm cell or < 0.1 for 5 cm cellBenzo(a)pyrene ≤ 0.25 mg/kg (250 ppb)In the final food contact item, a maximum of 2.5 % carbon black by weight is allowed

Japan

The Japan Hygienic Olefin and Styrene Plastics Association (JHOSPA) has imposed the following purity and specification requirements:

Toluene extract <= 0.1%Benzo(a)pyrene <= 0.25 mg/kg (250 ppb)

China

China has adopted the following requirements:

Toluene extract ≤ 1%Benzo(a)pyrene ≤ 0.25 mg/kg (250 ppb)In the final food contact item, a maximum percentage of carbon black by weight allowed depends on the type of polymer:

- In PMMA, PU, UP, PVC, PVDC, PF, PBT, PEI, PPE, PPS, POM, and LCP: maximum 2.5%- In PE: maximum 3%- In PP, ABS, PS, AS, PET, PA, PET, and PC: dosage as necessary

The imposition of these regulations has led to shut down of many small-scale specialty carbon black manufacturing plants in China and the US. This, in turn, has increased the prices of specialty carbon black to an extent across the globe due to demand–supply deficit.

Additionally, the production of carbon black emits various harmful gases such as carbon dioxide, nitrogen oxide, carbon monoxide, and others. Excessive contact with specialty carbon black causes skin irritation & respiratory tract irritation, and diseases like asthma, and dermatitis, which is a restraining factor for the specialty carbon black market during the forecast period. Moreover, the rising demand for eco-friendly products like green tire manufacturers being replaced with silica is restraining the growth of the specialty carbon black market. Environmental concern has always been a major challenge in the specialty carbon black market which affects it negatively.

Thus, the stringent regulatory restrictions and emission of harmful gases during the production of specialty carbon black are expected to hamper the growth of the global specialty carbon black market to an extent during the forecast period.

Specialty carbon black is produced by thermal decomposition or partial combustion of hydrocarbons such as carbon black oil, coal tar pitch, oils (aromatic oils), calcined petroleum coke, and others. It is majorly produced by the incomplete combustion of heavy petroleum or crude oil products including coal tar, ethylene cracking tar, and some vegetable oils. Thus, the fluctuations in crude oil prices will likely impact the price of specialty carbon black.

Crude oil prices are highly volatile owing to the major influence of the Organization of Petroleum Exporting Countries (OPEC), which controls 40% of the world's oil supply. The OPEC sets the production levels and can influence oil and gas prices based on decreasing or increasing production. Also, changes in supply and demand cause oil prices to fluctuate. When supply exceeds demand, the prices fall, and vice versa. Moreover, political turmoil, natural disasters, and production costs (refining) also affect crude oil prices. Most manufacturers, such as Greenlam Industries Limited, import raw materials that earn high costs, which increases the cost of plastic materials. In addition, in the absence of a formal hedging mechanism, the companies remain exposed to foreign exchange risks.

Many other factors affect the price of crude oil. The outbreak of COVID-19 negatively affected the crude oil market, the turmoil that the benchmark for US crude oil fell into negative territory for the first time in late April, and the price of Brent Crude, the benchmark for Europe and the rest of the world, also fell significantly. Even if prices have already rebounded due to technological advancements and the rapidly decreasing cost of renewable energy, it is unlikely that they will rise with the same intensity as they did during the global economic collapse of 2008. These factors will likely hamper crude oil prices, automatically affecting the global market. According to Statista, the annual average OPEC oil price stands at USD 102.97 per barrel as of October 2022. This is up from the previous year and comes with the challenge of an energy supply shortage and sanctions on the Russia-Ukraine war.