SIC 2895

This category covers establishments primarily engaged in manufacturing carbon black (channel and furnace black). Establishments primarily engaged in manufacturing bone and lamp black are classified in SIC 2816: Inorganic Pigments.

NAICS Code(s)

325182 (Carbon Black Manufacturing)

Industry Snapshot

Carbon black is essentially an oil by-product used to strengthen rubber. It is made by shooting a hot mist of oil particles into a flame, a very expensive process that has limited the number of competitors in the industry. Carbon black is a general name for a variety of trade name products such as acetylene black, attrited black, channel black, flame black, furnace black, lamp black, and thermal black. Carbon black production requires large amounts of heat. In addition to its main use in tires, the powdery reinforcing agent is used to make inks and other everyday products.

In 2000, U.S. carbon black shipments were worth more than $1 billion, and carbon black sold at prices between 28 and 46 cents per pound, depending on the grade. The vast majority of carbon black produced in the United States in the late 1990s was consumed by rubber and tire manufacturing companies.

Organization and Structure

Carbon black is largely a homogenous product with many trade names. It is essentially an oil by-product used to make tires, inks, and other products. The principal economic industries responsible for the purchase of carbon black were domestic manufacturing industries, which purchased nearly 95 percent of the industry's shipments. A 1998 ranking of purchased carbon black output found these industries responsible for carbon black usage: tires and inner tubes, which purchased approximately 50 percent of the industry's shipments; industrial applications, which used 15 percent of the carbon black manufactured in the United States; and specialty applications, such as wiring, plastics, and coatings, which used 10 percent.

In the late 1990s, 22 establishments were engaged in the production of carbon black. These establishments employed 1,860 workers in 2000. The U.S. carbon black industry was centered primarily in southern states. Eight companies operated out of Texas, while five were based in Louisiana.

Background and Development

The Cabot family was involved in carbon black production from the industry's outset. In 1882, Godfrey Cabot built a carbon black plant in Buffalo Mills, Pennsylvania. At the time, carbon black was made by impinging a gas flame against steel. After World War I, it was discovered that carbon black had properties for reinforcing rubber products. It was this innovation that fueled the industry's growth.

As early as 1864, carbon black was used as a printing ink and it is still employed in this sector in the late 1990s. The most revolutionary application was developed for the rubber industry, which discovered that carbon black made tires tougher. In 1920, the rubber industry consumed only 40 percent of the carbon black produced. Today, the rubber industry is the largest market for carbon black.

By 1972 carbon black prices were deteriorating because production capacity was greater than production. Production was three billion pounds per year, while production capacity was about four billion pounds per year. In addition, the cutback in gasoline usage that followed the oil embargo of 1973 took a heavy toll on carbon black demand. At that time, 95 percent of carbon black use was associated with automobile applications; 70 percent went into tire production alone. Higher costs were also having a detrimental effect on the industry. As carbon black prices increased, demand for the industry's products was reduced. Carbon black production capacity fell from an estimated 4.21 billion pounds in 1979 to 3.38 billion pounds in 1981. The decline in 1978 and 1979 mirrored the downturn in the U.S. automotive industry, but export business buoyed the industry.

By the 1980s, with four or five years of increasing prices behind it, relative stability had returned to the carbon black market. Prices for carbon black generally followed oil prices. As oil prices stabilized, so did prices for carbon black.

The total value of industry shipments increased 21 percent from $570 million in 1987 to $692 million in 1990. This number declined to a decade low of $604 million in 1991, but continually rose to $800 million by the mid-1990s. Despite the increase in carbon black shipments, leading producers in the fiercely competitive and sagging U.S. auto industry compelled producers to enter overseas markets. In the early 1990s, U.S. producers established operations in Europe and in Japan. The leading U.S. producer was Cabot Corporation, with total mid-1990s sales of $1.69 billion. It recorded negligible profits in the United States, but generated huge profits abroad.

Leading companies, including Cabot Corporation, continued to expand into international markets in the early 1990s. In 1992, Cabot opened a new carbon black plant, Cabot Kashima, in Kashima, Japan, which produced special grades of carbon black. Many in the industry were also expanding into the budding capitalist societies of eastern Europe. Also during this time of exploration into international markets, new low cost production processes were developed, and recycling efforts in the rubber and tire industries were encouraged. All these improvements within the carbon black industry were implemented to enable U.S. producers to compete against international export companies.

As the carbon black industry entered the mid-1990s, U.S. producers were facing stiff competition from traditionally import-oriented countries. U.S. producers were seeking new markets in developing economies such as China. The demand for carbon black in China was expected to grow 6.6 percent per year during the 1990s. U.S. consumption of carbon black was also projected to increase an average of 2.7 percent annually to $640 million in 1997. This projection was predicated on the gradual recovery of the auto industry.

By March 1995, U.S. demand for carbon black caused a 10 percent increase in price. This dramatic increase was not to be repeated the following year, however. Instead, 1996 operating rates were high and pricing was weak as carbon black sold for 28 to 50 cents per pound. Industry leaders attempted to raise prices 5 percent but were unsuccessful. Tire manufacturers, who purchased 50 percent of U.S. produced carbon black, resisted the price increase.

Current Conditions

Despite tire manufacturers protestations, carbon black prices rose in the late 1990s, as demand for the commodity outstripped supply. The automotive sector, which consumed carbon black for tires, boomed in the bull market of the late 1990s. Moreover, the growing popularity of sport utility vehicles—which used bigger tires that wore out faster than on cars—fueled demand for carbon black. Carbon black manufacturers also enjoyed low crude oil prices, which kept production costs to a minimum.

However, in 1999, rising crude oil prices impacted the carbon black market. While demand for tires remained strong in North America, a surge of cheaper import tires undercut carbon black prices. Tires originating in Korea and Brazil claimed an increasing share of the market.

The total value of carbon black industry shipments grew from $949 million in 1999 to $1.07 billion in 2000. The cost of materials over that time period grew from $402 million to $533 million.

Industry Leaders

The Boston, Massachusetts-based Cabot Corporation was the world's largest producer of carbon black in 1998, producing some 995 million pounds. The Cabot Corporation was a conglomeration of specialty metals, chemical, and energy businesses. When the carbon black market staggered in the early 1980s, Cabot expanded into fields such as high-technology ceramics. Cabot also kept effective control over the slow-growth carbon black market segment of through restructuring efforts, including drastic reductions in unit costs to counter the heavy fixed capital investment required for carbon black production.

In 1996, Cabot bought a plant in Merak, Indonesia. The plant was expected to double its capacity to 60,000 metric tons per year. Also in 1996, Cabot instituted a system that measured the performance of its 71 carbon black plants and conveyed the information to all plant managers. Cabot was able to stay ahead of competitors and quadruple earnings per share through cutting costs, modernization, and restructuring. In 1997 the company introduced a new line of carbon black pigments, which helped it remain at the forefront of the industry. Cabot's efforts were rewarded. Sales in 1998 were approximately $1.7 billion, and the company employed 4,800 workers.

The second-largest producer of carbon black was Columbian Chemicals Co. of Atlanta, Georgia. In 1996, Columbian underwent a 25 percent expansion that increased its global capacity by 180,000 pounds. This restructuring cost approximately $60 million. The company operated 11 plants in 8 countries. Columbian's total sales were $260 million in 1998, and they employed 1,400 people.

Another major industry player was Degussa's Carbon Black Division of Ridgefield Park, New Jersey, with $150 million in sales and 300 employees. In 1998, Degussa moved aggressively to capture a greater share of the Asian market for carbon black by acquiring the carbon black division of LG Chemical in South Korea. Other leading carbon black producers included JM Huber Corporation's Engineered Carbons Division (bought by Gantrade Corporation in 1995) of Borger, Texas, and Norit Americas Inc. of Atlanta, Georgia.


In 2000 approximately 1,860 workers were employed in the carbon black industry. Of this total number, 1,304 were production workers who earned an average wage of $24.79 per hour. On average, these production employees worked a total of 46 hours each week.

The U.S. Bureau of Labor Statistics forecast that most of the industry's occupational categories were expected to increase until 2005, reflecting the projected growth in demand for the industry's products. However, many of the occupations expected to grow most rapidly were nonproduction jobs, such as sales workers and highly skilled professional positions.

Research and Technology

In 1996, Degussa AG, an industry leader, researched the effects of carbon black in relation to workplace exposure and found it safe. This study was completed after reports from the International Agency for Research on Cancer (IARC) of the World Health Organization (WHO) indicated that carbon black could cause tumors in rats. IARC found that long-term exposure to fine dusts, including carbon black, could cause lung cancer and respiratory diseases. They wanted to reclassify carbon black as a carcinogen. Degussa countered with data that only rats exposed to massive amounts of dust were effected. They concluded that there was no evidence to show that mice, hamsters, or humans were significantly bothered by the dust.

Further Reading

"Carbon Black Makers Enjoy High Demand, Low Oil Prices." Chemical Marketing Reporter, 27 April 1998.

"Carbon Black Poses No Threat Degussa Says." Chemical Marketing Reporter, 5 August 1996.

Cho, Aileen. "Waste Toner May Beef Up Asphalt." ENR, 30 September 1996.

"Columbian Has Details on Hike in Carbon Black." Chemical Marketing Reporter, 22 April 1996.

Henry, Brian. "Cabot Using Technology to Transform Carbon Black." Chemical Marketing Reporter, 21 October 1996.

Landau, Peter. "Rising Feedstock Costs Crimp Profit Margins for Carbon Black." Chemical Marketing Reporter, 8 November 1999.

Morris, Gregory DL. "Columbian Details Expansions." Chemical Week, 24 April 1996.

Shearer, Brent. "Carbon Black Makers Adding New Capacity." Chemical Marketing Reporter, 23 September 1996.

United States Census Bureau. "Carbon Black Manufacturing," October 1999. Available from .

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from .

Warren, J. Robert. "Cabot Sees Strong Asian Markets for Carbon Black." Chemical Marketing Reporter, 25 March 1996.

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