China's Jinneng to build carbon black facilities

Phase one of the project has earmarked $1.6 billion, and annual capacity is expected to be at 480,000 metric tons for carbon black, 900,000 tons for propane dehydrogenation and 900,000 tons for high performance polypropylene facilities. It is slated to come on stream by 2020.

Phase two, with an investment of $1.4 billion, will add annual capacity of 900,000 tons of PDH, 260,000 tons of acrylonitrile and 100,000 tons of methylmethacrylate. Construction is expected to take two years.

The 16.1 million-sq.-ft. site is adjacent to the smart factory of Doublestar, one of Jinneng's major clients for carbon black. The company also supplies to Sentury, Sailun and Bridgestone.

Located in nearby Dezhou, Jinneng currently has 300,000 metric tons of carbon black capacity and 60,000 tons of white carbon black capacity annually. Last year, the Shanghai-listed company reported a 57 percent jump in revenue to $910 million, 22 percent of which was from these two segments.

China's carbon black prices have more than doubled since 2016, now at around $1,130 per ton. Last year, Jinneng had 28 percent gross margin for its carbon black business, up from 21 percent in 2016.