Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you clarify if the current rubber volumes are at a trough and if you expect imports to impact next year? Also, how does this relate to your comments on flat gross profit per ton? A: We are well along in our negotiations, and while not completely finalized, we have had a positive cycle that we can build on for 2025. We see some mix changes in our customer base, which makes us less vulnerable to consumer sell-downs. Given the current high import levels and ongoing efforts to retain market share, coupled with potential duties, we expect a positive outlook for next year.
Q: How conservative is your expectation for gross profit per ton, and is there potential upside with favorable contract negotiations? A: The negotiations have been positive, continuing to move us forward, but not at the earth-shattering level of a few years ago. We are adjusting our customer mix, and while not all negotiations are complete, we are ahead of schedule and will provide real guidance with our Q4 results.
Q: Can you provide your perspective on capacity additions in the carbon black industry over the next few years? A: We don't foresee significant new capacity additions in North America or Europe due to economic and market uncertainties. Maintenance and reliability investments may yield small capacity gains. In Asia, particularly China, the current economic climate is not conducive to expansion, and sustainability concerns add further uncertainty.
Q: How do you see the impact of potential higher tariffs on imports from China and other Asian countries? A: Higher tariffs would be beneficial for us as we have mainly local production. Our customers are impacted by imports, so more local manufacturing would be a positive development.
Q: Regarding the Huaibei plant, how much of a drag has it been in 2024, and should we expect a benefit in 2025? A: The impact this year has been low to mid-single digits, and we expect at least a $10 million positive swing next year as we reload the plant and improve operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.