Tokai Carbon has raised its full-year 2026 forecast after first-half results came in ahead of its earlier expectations, with the Japanese carbon materials producer citing a projected recovery in automotive and tire industry demand. The company now expects full-year net sales of Yen386 billion, about €2 billion, up from its previous forecast of Yen370 billion and 19.5% higher than 2025 sales. Operating income is now forecast at Yen35 billion, compared with the previous forecast of Yen28 billion and Yen25.85 billion in 2025. Tokai said the revision reflects expected demand recovery in the automotive and tire markets, which are key customers for its carbon black segment. The update is relevant to the tire industry because carbon black remains one of the main reinforcing materials used in tire production, and demand trends in this segment often reflect broader movements in tire manufacturing and automotive supply chains.

Carbon black segment reports higher sales

For the six months ended June 30, Tokai Carbon’s Carbon Black business increased sales by 10.5% year-on-year to Yen83.5 billion, compared with Yen75.57 billion a year earlier. The increase came despite lower sales volumes, which the company attributed to production adjustments among tire manufacturers.

The rise in sales value was linked partly to the consolidation of a Bridgestone subsidiary in Thailand acquired in the second half of 2025. Tokai also cited new customer development and spot order activity as factors supporting sales.

Operating income falls despite stronger sales

Although sales increased in the Carbon Black segment, operating income declined 11% to Yen7.24 billion. Tokai said the decrease was mainly due to higher depreciation associated with the start-up of its new carbon black plant in Thailand.

On an EBITDA basis, however, the segment performed better. Carbon Black EBITDA rose 9.7% year-on-year to Yen14.35 billion, indicating that underlying earnings improved before depreciation and other non-cash costs.

Tire and automotive demand expected to recover

Tokai said demand is expected to recover in the automotive and tire industries during the second half of 2026. These sectors are the main target markets for the company’s Carbon Black business, making their recovery an important factor in the revised full-year outlook.

Carbon black demand is closely linked to tire production because the material improves abrasion resistance, durability, strength and overall tire performance. A recovery in tire manufacturing can therefore support higher demand for carbon black and related rubber industry materials.

New Thailand plant affects earnings profile

The start-up of Tokai’s new carbon black plant in Thailand increased depreciation costs during the period. While this weighed on operating income, the plant also strengthens the company’s regional production base in Southeast Asia, a major area for tire and automotive manufacturing.

The acquisition and consolidation of the Bridgestone subsidiary in Thailand also contributed to Tokai’s carbon black sales performance. The region remains strategically important because of its role in tire production and broader rubber industry supply chains.

Outlook reflects broader carbon materials portfolio

Tokai’s revised forecast also reflects expectations beyond carbon black. The company cited continued strong demand for solid SiC focus rings used in the memory semiconductor market within its Fine Carbon segment.

The updated guidance therefore combines expected recovery in automotive and tire-related carbon black demand with strength in selected advanced carbon materials markets.

Carbon black remains central to tire manufacturing

Tokai Carbon’s outlook highlights the continued importance of carbon black in tire manufacturing even as the industry increases its focus on sustainable materials, recovered carbon black and circular economy strategies. Conventional carbon black remains a core reinforcing material, while producers and tire manufacturers are also exploring lower-carbon and recycled alternatives.

For the tire supply chain, stronger demand in the second half of 2026 could support carbon black producers, tire manufacturers and related rubber materials suppliers. Tokai’s revised forecast suggests that the company expects improved market conditions after earlier production adjustments among tire makers.

Article source: Tokai Carbon.