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Spread - carbon black (CBFS feedstock)
What it is
Carbon black feedstock oil is a heavy residual stream from refineries and crackers, and is the dominant input cost in carbon black manufacture. The spread between CBFS cost and carbon black realisation is the industry's margin
CBFS is crude-linked, so the input follows oil markets
Impact on industries
- Crude-linked input against customer contracts that reprice on a lag leaves the producer exposed in the interval
- Formula pricing passes CBFS movements through to tyre customers, so the business is a conversion spread rather than a commodity bet
- Feedstock availability depends on refinery configuration and yields, so supply can tighten independently of price
- The same conversion-spread structure as sponge-iron-to-billet and HRC-to-CRC in other industries