Cabot Corporation

And then are you being impacted at all by Dow's silicone rationalization efforts in Europe?

So as you know, Dow has announced the closure of their siloxanes plant in Barrie, Wales, and we have a fume silica plant. next door to them where we exchange some feedstock and materials as part of a long-term agreement that goes out through the end of 2028. And we're currently in discussions with Dow on exactly how they'll perform against that contract. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of David Begleiter with Deutsche Bank. Your line is open. Please go ahead.

Hi, this is Emily Fusco on for Dave Begleiter. Maybe a question on tire contract prices. How much do you expect 2026 prices to be down or expectations by region? And maybe if you could give some color on what percentage of negotiations have been settled. Thank you.

Sure. So what I can tell you is that we have completed roughly 25% of our contracts at this point, which is behind where we were at this time last year, where we were closer to 45% of the negotiations complete. And I think it's taking a little longer this year in part because everyone is having a difficult time trying to project exactly where they're demand expectations should be for 2026 given all of the turbulence. I can't comment on final outcomes here as we're obviously far from done and this is competitive information. Thank you and one moment for our next question.

Our next question comes from the line of Joshua Spector with UBS. Your line is open. Please go ahead.

Good morning. It's Chris Perala on for Josh. Could you elaborate on the, for the performance chemicals, the underlying assumptions that you have baked into the guidance for this year in terms of volume and growth, volume and price expectations or mix expectations?

Sure, so in performance chemicals, if you think about the basket of applications that we sell into it typically you know, over a longer period of time will grow at sort of one and a half to two times GDP. Now what we are seeing in this segment is certain applications, particularly those in automotive and construction related. um are uh are currently in what i would say is a cyclical trough and so over time we certainly expect those to improve but the expectation of uh any material improvement into 2026 i think is is fairly limited now where we do have um very positive expectations is in our targeted growth areas that i commented on in my prepared remarks, areas including battery materials, the infrastructure, applications, the broad trends around digitalization and how that's driving increased demand for our fume silica for the CMP application for chip manufacturing. Those types of applications continue to exhibit strong growth, and we're performing well there. When we look at the overall expectation for volumes, we certainly expect volumes to be up in 2026, but again, a mix of some headwinds that are more than being offset by these targeted applications with strong tailwinds.

Depending on the application mix and your expectations, is there a mix-up list, or is I know the battery materials is kind of higher value, but is there a mix uplift expected this year?

Yeah, I would say the mix is probably pretty balanced. These applications that are growing well have good strong margins, but as you might recall, volumes that get pulled through from the automotive sector typically have pretty high margins as well because that business tends to be specified. So I would say the margin uplift from

um from mix would be you know fairly i would say fairly fairly balanced the trade-offs would be fairly balanced there all right thank you sean thank you and if you would like to ask a question please press star one one and our next question will come from the line of kevin e stock with jeffries your line is open please go ahead uh yeah thank you i'm uh asking on behalf of lauren some

I was just wondering if you could share a little bit about how maybe the regional utilization rates kind of shook out during the quarter, you know, maybe by region, if you have that sort of data. Thanks.

Sure, sure. So the regional picture has not really changed much from our prior comments. Certainly in the western regions, the impact from tire imports from Asia has reduced domestic production from our customers. I think if you go around the world, what you'll see in North America is that utilizations are somewhere between 75% and 80%. They're higher in Europe, I would say somewhere in the 85-ish percent range, in part because Europe is a region that is net short of carbon black capacity, and there's you know, value that's placed on local supply. And we also had some contract volume pickup in last year's agreement. So overall, the utilizations are running in a higher place there. South America, they are lower. And South America is a region that has been impacted by tire imports. But as I commented earlier, We're starting to see trade policy and tariff policy begin to impact the level of tire imports, reducing the level of tire imports in the most recent data. So that's encouraging, and hopefully we'll shift things back a bit in the region there to improve utilizations. But right now, those remain in the 70s at this point. And then if you look at Asia Pacific, we're running at quite high utilizations across our Asia assets as we typically do. And here we're really choosing carefully the customers and products that we're supplying to maximize the value out of our Asian assets and to align our capacity with customers that really value our value proposition of product performance and quality and supply reliability. So that's a bit of a walk around the world in terms of utilizations. I would say that's largely been the story throughout 2025, so no recent shift in that. And again, the question as we move forward is how do regional volumes develop in large part given how tire imports are likely to play out.

Understood. Thank you very much.

Thank you, and I would like to hand the conference back over to Sean Cohen for closing remarks.

Great. Thank you very much for joining us today. Apologies for the technical difficulty at the very beginning there, but Glad we were able to get back connected here. Thank you for joining. Appreciate your support of Cabot, and we look forward to talking to you again throughout the next quarter. Thank you.

This concludes today's conference call. Thank you for participating, and you may now disconnect.