Carbon Black Feed in

Europe & Americas

Vincent J. Guercio

CTC International

International Tar Association Annual Conference

September 2018 - San Francisco

Tim Bart

Carbon Management Intl. LLC (CMI)

T O P I C S

Global CBFS Types

CBFS - Europe & Americas

U.S. CBO Exports

Petroleum vs Coal Tar CBFS

IMO 2020 - Impact on CBO2

Decant Oil (DO)Slurry Oil, FCC Bottom Oil (FBO), Clarified Oil

Ethylene Tar (ET)Pyrolysis Fuel Oil (PFO), Ethylene Bottom Oil (EBO), Ethylene Cracker Residue (ECR)

Type # 1 – Contains naphthalenes – 200+℃ residue

Type # 2 – Naphthalenes removed – 300+℃ residue

Type # 3 – Heart cut by distillation – 270-370℃ distillate

Coal Tar (CT)Raw Coal Tar – Recovered from coke oven

Anthracene Oil (ATO)/Creosote – 300-360℃ tar distillate

CBO Mix – 300-430℃ distillate or 50-60% ATO/soft pitch mixture3

Carbon Black Feed (CBF) Types

DO ET #1 ET #2 ATO CBO Mix

Sulfur, wt% 0.7 - 4.5 0.05 - 0.1 0.2 - 1.4 0.3 - 0.7 0.5 - 0.8

Ash, wt% 0.02 - 0.10 <0.01 <0.01 <0.01 0.01 - 0.06

Asphaltene, wt% 1 - 8 10 - 20 15 - 30 1 - 5 3 - 7

Toluene Insoluble, wt% 0.03 - 0.10 0.01 - 0.03 0.01 - 0.05 0.01 - 0.03 4 - 9

BMCI 115 - 140 120 - 140 120 - 140 140 - 160 160 - 190

Specific Gravity 1.06 - 1.12 1.05 - 1.09 1.08 - 1.12 1.09 - 1.14 1.17 - 1.23

API Gravity +2 - -5 +3 - -2 +1 - -5 -2 - -7 -11 - -16

CBO Types - Typical Properties

4

Qualitative CBO Comparison

5

DO ET ATO CBO Mix

Sulfur - - +++ ++ ++

Ash - - - +++ +++ -

Asphaltenes - - - - + -

Toluene Insoluble - ++ ++ - -

Metals - - +++ +++ +

Carbon - + +++ ++++

Nitrogen ++ ++++ - - - - - -

Coal Tar11690

Ethylene Tar

2330

US Decant4960

LocalDecant3040

201722 million Tons Total

Coal Tar3550

Ethylene Tar

2500

US Decant 5720

Local Decant2230

200414 million Tons Total

World CBFS Types Coal tar surpassed decant oil in 2011

6

EURussiaUkraine

China(CT / ATO / CBO Mix)

NE Asia JKT

2017 World Coal Tar CBFS Use(11.7 million Tons Total)

7

EU

Russia/Ukraine

USA

NE Asia JKT

South Asia

2017 World Decant Oil CBFS Use(8.0 million Tons Total)

Africa

Mid-East

8

Other

Americas

EU

RussiaUkraine

China

NE Asia JKT

South Asia

2017 World Ethylene Tar CBFS Use(2.3 million Tons Total)

Other

Americas

Africa

Mid-East

9

USA

Ethylene Tar

Coal Tar

Decant Oil(Slurry Oil)

2017 USA CBFS Types(2.6 million Tons Total)

10

Ethylene Tar(ECR - Ethylene Cracker Residue)

Local Decant

Oil

Coal Tar(Anthracene Oil)

US Decant

Oil

2017 Europe CBFS Types(1.9 million Tons Total)

11

Domestic Demand

Exports

0

1000

2000

3000

4000

5000

6000

7000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

ton

s

US CBO Demand

12

South Asia

North Asia

Europe

Americas + Africa

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

ton

sUS CBO Export Destination

13

Gulf Coast

West Coast

Great Lakes

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

ton

s

US CBO Export Source

14

Anthracene OilATO

CBO Mix

0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Kilo

ton

sChina CBFS Export History

Types

15

Crude Oil versus China Coal Tar

0

100

200

300

400

500

600

700

800

900

J14 A Jul O J15 A Jul O J16 A Jul O J17 A Jul O J18 A Jul

US

$ / T

on

Brent Crude China CT

16

South Asia CBFS – US DO vs China Mix

0

100

200

300

400

500

600

700

800

J14 A Jul O J15 A Jul O J16 A Jul O J17 A Jul O J18 A Jul

US

$ / T

on

CBO Mix SAsia US CBO SAsia

17

IMO 2020 – Residual Market Disruption

International Maritime Organization Jan 2020 mandate

Lower global bunker fuel sulfur limit from 3.5% to 0.5%

Enforced by ship flag countries, not IMO

Ship owner options:- Burn LS distillates, resids, LNG, LPG, etc.

- Use HS resid but scrubb SOX from ship exhaust gas

- Obtain waiver or just ignore IMO mandate

Ship owners are worried about compatibility of future supply18

Unscrubbed

HSFO Scrubbed HSFO

Marine Diesel 0.1%

Marine Diesel 0.5%

Residual Oil 0.5%

LNG

0

50

100

150

200

250

300

350

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Millio

n

To

ns

World Bunker Fuel TypesHistory & Forecast

World Decant oil 50 million tons

Decant oil CBO 8 million tons

19

Residual Oil Demand Changes

20

IMO 2020 – Oil Market Effects

Mandate will disrupt the residual oils market & pricing

HS bunker is 57% of residual fuel oil market

Much lower value for HS resid and higher value for LS resid but only for 3-5 years while HS glut is being absorbed

Refiners must find new markets or destroy surplus HS resid

Most refiners cautious, but some are taking action:

- Installing cokers, hydrocrackers or resid desulfurization

- Segregating and moving currently available LS resid blendstocks

- Introducing 0.5%S resid bunker fuels21

IMO 2020 – Decant Oil CBO Effects

The resid market includes decant oils because they are used to lower bunker oil viscosity

HS decant oil will be cheap with much higher value for LS

HS decant CBFS should have a advantage during 2020-2025

Time period depends on actions of shipowners and refiners

CB plant off-gas SOX scrubbers should be economical

Ethylene tar and anthracene oil could be more attractive CBO22

Thank you!

Carbon Black Feed in

Europe & Americas

Vincent J. Guercio

CTC International

Carbon Black World 2018

September 2018 - Dusseldorf, Germany

Tim Bart

Carbon Management Intl. LLC (CMI)

Thank you!

Vielen Dank!