Cabot's reinforced materials business will bounce back strongly in 2021, but sales may not reach the level of 2019, Cabot President and CEO Sean Keohane said on Monday.
The unit, which supplies black carbon materials to the auto and tire industries, will be driven by strong spot prices in Asia, rising raw material costs and a surge in underlying demand, Mr. Corcoran said on a conference call.
He noted that LMC, a global economic data analysis firm, predicts that demand for tires in 2021 will be 5-6 percent lower than in 2019.
"We are seeing a very rapid recovery now, which is of course good -- as long as there is no big reversal in the economic impact associated with the new pandemic, the rebound is likely to continue."
Still, Mr. Corchan said, "there's a long way to go to get back to what people would call normal levels, or what I would call 2019 sales levels."
He noted that tire demand and auto demand are improving month by month from October to November.
"The economic recovery is undoubtedly related to stabilising the public health crisis, which remains key to regaining consumer confidence and restoring the economy to its full potential," Mr Corchan said, citing LMC estimates that replacement tyre sales worldwide are expected to fall by 12 per cent in 2020 as a whole.
Replacement tire sales for light vehicles improved in all regions in the third quarter of this year, falling only 6% from a year earlier (similarly below), compared with a 31% drop in the second quarter.
The fourth quarter is expected to be close to 2019 levels, with total replacement tire sales expected to decline 2%.
Sales at Cabot's reinforced materials division fell 30% to $1.2 billion in the fiscal year ended Sept. 30.
Earnings before tax, or EBIT, fell almost 40 per cent to $162m.
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