By Ken Schaeffer
This is the third in a series of articles over the past three years concerning news, trends and issues impacting the world-wide activated carbon market. Activated carbon is the universal adsorbent that helps make our lives safer, our environment cleaner and has hundreds of consumer, commercial and industrial uses and applications. It is generally manufactured from wood, coconut shell and various grades of coal. Each type of raw material produces activated carbon products that are suitable for a myriad of applications. This article will focus on the current supply situation for activated carbon, as well as factors that skew activated carbon prices and availability. Many readers utilize activated carbon for POU/POE drinking water applications to remove chlorine, chloramines and organic chemicals from potable water.
The universe of activated carbon manufacturers in North America is not large (five major and two minor producers) and there have been several significant changes in the past year. A large lignite-coal carbon manufacturer in the US was recently sold to another large US company that manufactures carbon black. One can expect to see product, personnel and other changes happen as the two companies merge. Another large bituminous coal carbon manufacturing company in the US had a change in the CEO position and new strategies are being implemented to rationalize product lines and improve production and product distribution world-wide. The macadamia-nut shell activated carbon plant in Hawaii closed down in November 2012 and the company has declared bankruptcy. The Australian company that announced a new coal carbon plant in West Virginia two years ago has been relatively silent regarding the plant status but I assume it is going to be a reality as it will target the flue-gas, mercury removal market. A new, large carbon reactivation furnace has been installed near Phoenix, AZ that has started processing spent granular activated carbon from western drinking water plants. A large multi-billion dollar company has put its water group, which includes three activated carbon reactivation facilities in the US, up for sale. As with any market or industry, the activated carbon market is subject to changes in manufacturers, suppliers, distributors, regulations, imports, customers and raw material that affect market trends in supply and pricing issues.
The major factors in the activated carbon industry today that affect supply and capacity include the renewal of the Department of Commerce/Federal Trade Commission anti-dumping duty on certain steam-activated carbon from China for another five years (until 2017); the final US EPA Mercury and Air Toxics Standards (MATS) Rule that mandates mercury reduction at coal-fired power plants by 2015 (a one-year extension is possible in caseby-case review) and the continuation of DBP regulations (that are progressing from stage 1 to stage 2 this year and then stage 3). These all dictate the size of the water systems that have to comply and when. The China duty means less coal-base activated carbon will continue to be imported from China, as has been the case for the past five years. Mercury-reduction regulations also include cement plants and incinerators. All of this reflects a market that is currently estimated to be 175-million pounds of powdered activated carbon (PAC) per year and to eventually require approximately 800 million pounds of PAC per year by 2016. Activated carbon manufacturers are watching the flue-gas, mercury-reduction market closely and strategizing about plant production capacity increases to meet future demand.
In addition to production capacity in North America for activated carbon, the US imports activated carbon products from around the world. Figure 1 depicts the levels of imported activated carbons from several areas world-wide. The trend in imports has been increasing in dollar value the past three years (2010: $153M; 2011: $162M and 2012: $ 187M) but 2013 is showing a dip of 20 percent in the first quarter compared to the first quarter of 2012. It remains to be seen if 2013 will be an up- or down-year. One must remember activated carbon pricing has been rising; naturally, the dollar value increase is partly attributed to that fact. Imports mainly consist of coconut-shell activated carbon products from Asia (Sri Lanka is the largest coconut-shell carbon supplier followed by India, Indonesia and the Philippines); wood-base carbons from Europe, Latin America and China (acid-activated wood carbon is not subject to the anti-dumping duty) and lignite-coal carbons from a US manufacturers’ Canadian plant and from Europe.
Most POU/POE water treatment systems now use coconut shell activated carbon products in granular form or carbon blocks made from coconut-shell PAC. Coconut-shell activated carbon Activated Carbon 2013 Market Update or, the Carbon Convolution By Ken Schaeffer Figure 1. US activated carbon imports, 2009-2012* is the raw material of choice as it has low ash (low metals), very good attrition resistance and generally higher activity level (more surface area). Coal-base granular and powdered activated carbon may have metals concerns and wood-granular carbon has poor attrition resistance. The POU/POE market demands that activated carbon meet California’s Proposition 65 standard (very low arsenic) and these carbons also typically meet NSF standards. Most carbon are also tested for antimony and aluminum levels. When purchasing activated carbon, a certificate of analysis (COA) should be offered as well as Proposition 65 test confirmation and other testing the customer requires for his application. A relatively new trend in activated carbon is the coming of eco-labeling, sustainable certifications that are being offered by WQA and NSF. This is an effort to recognize manufacturers that maintain the best manufacturing processes, packaging and shipping methods that do the least harm to the environment.
If one buys activated carbon, they want to know what is going to happen to pricing in the future. The coconut-shell activated carbon market went through a dramatic rise in price a few years ago due to char shortage and the Japanese tsunami situation. Only in the past year have prices drifted down and stabilized. Ocean freight has dropped slightly and new coconut-shell carbon plants have opened, which leads to more competition. I do not see any dramatic change in coconut-shell carbon prices in the next year. Granular coal-base carbon will probably increase due to higher demand (DBP rule) and the continuing Chinese anti-dumping duty. Coal PAC is probably in over-supply, as several plants built up early to meet PAC mercury removal market demand that has been slower to materialize than expected. Before a plant can use PAC to reduce mercury, it must buy and install an activated carbon injection system (ACI); there has been a recent uptick in the number of ACI systems being ordered to prepare for the 2015/2016 regulations deadline. The currency exchange rate can have an impact on carbon pricing; therefore, the exchange rate with Asian countries for coconut-shell carbon and China for coal-base carbon is always a factor. Energy costs have a bearing on activated carbon production but the main cost factor is raw material, whether it’s wood, coal or coconut charcoal.
If buyers want to reduce their activated carbon cost, they should first talk to their carbon supplier and make sure they are using the correct carbon for applications to achieve the desired results. For some applications, one can use either coal or coconut shell carbon, so pricing on each type should be checked. Some applications use water-washed or acid-washed carbon to reduce dust; manufacturing de-dusting processes have improved and perhaps one can now pay less for a de-dusted carbon rather than buy a washed carbon. To further add to savings, reevaluate product and packaging needs. If 1-CF bags are the norm but standard 2-CF bags can be used, a buyer may save money; 1-CF bags are the most expensive packaging option. If there is a need for a few pallets several times a year, but the same few pallets are always purchased, buyers may be able to issue a blanket purchase order for the total number of pallets needed per year to get a volume discount. If payment terms are normally net 30 days, ask about two-percent-net 10 days and pay early to get a discount. If one buys carbon to fill small 1-2 CF tanks, investigate other carbon options, such as low-density coal; buying carbon that is 22 to 24 pounds per CF is usually better than buying 1-2 CF of carbon that is 28 pounds per CF.
Activated carbon can sometimes have much longer service life if one uses prefilters that reduce suspended solids entering the carbon bed and/or backwash the carbon at set intervals to remove particles that cause an increase in pressure drop. Some water treatment systems use carbon that is changed out on a time basis rather than when the carbon is truly spent. One should ask the carbon supplier to review these carbon system and change out criteria. In some cases and in certain applications, one can use reactivated carbon instead of the more expensive virgin activated carbon.
Activated carbon suppliers are in business to provide both the activated carbon products and technical support advice regarding the right carbon for applications. Take advantage of your supplier’s knowledge base.
About the author
Ken Schaeffer, President of Carbon Resources, LLC, has over 30 years experience in the activated carbon industry. He holds a BA in biology and an MS in environmental science from the University of Texas at Dallas. Schaeffer is past Vice-Chairman of the ASTM Committee on Activated Carbon D28 and past Vice-Chairman of the International Activated Carbon Manufacturers Association (IACMA). He can be reached at [email protected] or (760) 630-5724.