Tire Precipitated Silica Industry & Markets 2020

Confidential Report

Rubber Chemical Consultants Ltd

Tire Precipitated Silica Industry & Markets 2020 (3rd Edition)

Page 1 of 111 Report Number: RCCL204 Issue Date: 30th October 2020 Company1: 1 This report is licensed for use within the designated company only. Distribution of this report, either fully or partially, outside of the designated company is strictly prohibited.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 2 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Tire Precipitated Silica Industry & Markets 2020

1 CONTENTS

2 Executive Summary ...... 9 2.1 Scope ...... 9 2.2 Objectives...... 9 2.3 Market Drivers ...... 10 2.4 Market Demand ...... 11 2.5 Market Values ...... 13 2.6 Industry Outlook ...... 15 3 Introduction ...... 17 3.1 Definitions, Abbreviations and Nomenclature ...... 17 3.2 Scope ...... 19 3.3 Objectives...... 19 3.4 Information Sources ...... 20 3.5 Assumptions ...... 20 4 Methodology ...... 21 4.1 General Reporting Principles ...... 21 4.2 Consumer-Up Analysis ...... 21 4.2.1 Key Parameters ...... 22 4.2.2 Consumer Plant Parameters ...... 22 4.2.3 Product Technology Parameters ...... 22 4.2.4 Market Parameters ...... 23 4.3 Market Volumes for Tire Chemicals ...... 25 4.3.1 Consumer-Up Analysis ...... 25 4.3.2 Tire Parameters ...... 27 4.3.3 Tire Utilisations ...... 27 4.3.4 Reported Values ...... 29 4.4 Market Values for the Tire Segment ...... 30 4.4.1 Regional Valuations ...... 30 4.5 Data Validation...... 30

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 3 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

5 Industry Overview ...... 31 5.1 Raw Materials ...... 31 5.2 Manufacturing Process ...... 31 5.3 Manufacturing Landscape ...... 32 5.4 Key Market Segments ...... 34 6 Manufacturers ...... 35 6.1 Key Manufacturers ...... 35 6.2 Recent & Future Capacity Changes ...... 36 6.3 Manufacturing Capacities ...... 37 6.3.1 Global ...... 37 6.3.2 Regional ...... 38 6.3.3 Country ...... 39 6.4 Financial Analysis ...... 42 6.4.1 Global Manufacturers ...... 42 6.4.2 Chinese Manufacturers ...... 43 6.5 Manufacturing Developments ...... 45 6.6 Product Developments ...... 46 6.6.1 Historic Developments ...... 46 6.6.2 Current Landscape ...... 46 6.6.3 Future Developments ...... 49 7 Quantitative Market Drivers ...... 50 7.1 Tire Production by Type ...... 50 7.1.1 Non-Commercial Vehicle Tires ...... 50 7.1.2 Commercial Vehicle Tires ...... 52 8 Qualitative Market Drivers ...... 53 8.1 Historical Perspective ...... 53 8.2 Evolution of High Value Added Products ...... 53 8.2.1 PC and SUV ...... 54 8.2.2 Motorcycle and Scooter ...... 55 8.2.3 Commercial Vehicle Tires ...... 55 8.3 Market Positioning ...... 55 8.3.1 Manufacturer’s Tier Level ...... 55

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 4 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

8.3.2 OE Market ...... 56 8.3.3 RP Market ...... 56 8.4 Geographical Influences ...... 56 8.4.1 Performance Requirements ...... 57 8.4.2 Compounding Differences ...... 57 8.5 External Drivers ...... 57 8.5.1 Tire Labelling ...... 57 8.5.2 Sustainable Developments ...... 58 8.6 Competing Technologies ...... 60 9 International Trade ...... 62 9.1 Regional Trade Balances ...... 63 9.2 Africa ...... 64 9.3 China ...... 65 9.4 CIS...... 67 9.5 Europe ...... 68 9.6 India ...... 70 9.7 Middle East ...... 72 9.8 USMCA ...... 74 9.9 North Asia ...... 76 9.10 LATAM ...... 82 9.11 South Asia ...... 83 9.12 Average Trade Values per MT ...... 85 10 Market Demand ...... 86 10.1 Global Demand ...... 86 10.2 Regional Demand ...... 88 10.3 Country Demand ...... 93 11 Market Pricing ...... 97 11.1 China ...... 98 11.2 Europe ...... 99 11.3 USMCA ...... 100 12 Market Values ...... 101 12.1 Global Market Value ...... 101

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 5 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

12.2 Regional Market Value ...... 102 13 Estimated Rubber Capacity Utilisations ...... 104 13.1 Global Utilisation ...... 104 13.2 Regional Utilisations...... 104 14 Concluding Comments ...... 109 15 Appendices ...... 110 15.1 Tire Types and Subtypes ...... 110 16 Additional Documentation ...... 111

List of Figures

Figure 2.1 - Tire Precipitated Silica Market Drivers ...... 10 Figure 2.2 - Global and Regional Demand All Types 2015 to 2040 ...... 11 Figure 2.3 - Global and Regional Demand HDS Types 2015 to 2040 ...... 11 Figure 2.4 - Global and Regional Demand STS Types 2015 to 2040 ...... 12 Figure 2.5 - Market Values for All Types 2015 to 2040 ...... 13 Figure 2.6 - Market Values for HDS Types 2015 to 2040 ...... 13 Figure 2.7 - Market Values for STS Types 2015 to 2040 ...... 14 Figure 2.8 - Rubber Grade Production Capacity Growth 2015 to 2025 ...... 15 Figure 4.1- 'Consumer-Up' Market Analysis ...... 21 Figure 4.2- Consumer Plant Parameters ...... 22 Figure 4.3 - Product Technology Parameters...... 23 Figure 4.4- Market Utilisation Parameters ...... 24 Figure 4.5 - Extended Model for Tire Segment ...... 26 Figure 5.1 - Manufacturing Process for Precipitated Silica ...... 31 Figure 5.2 - Global Map of Precipitated Silica Manufacturing Plants as of September 2020 ...... 33 Figure 6.1 - Evonik vs Solvay, EBITDA/Revenue ...... 42 Figure 6.2 - Solvay Estimated Average Selling Price 2015 to 2020 Q2 ...... 43 Figure 6.3 – Gross Margin/Sales Revenue for Chinese Producers 2015 to 2019 ...... 43 Figure 6.4 – Half Yearly Gross Margin/Sales Revenue for Black Cat and Longxing 2015 to 2020 ...... 44 Figure 6.5 – Selected Chinese Manufacturers Average Selling Price 2015 to 2019 ...... 44 Figure 7.1 - Tire Production Growth for All Non-Commercial Tire Types 2011 to 2040 ...... 50 Figure 7.2 – Non-Commercial Tire Production Growth by Tire Type 2011 to 2040 ...... 51 Figure 7.3 - PC and SUV UHP AS Tire Production Growth 2011 to 2040 ...... 51 Figure 8.1 - PC and SUV Subtype Differentiation Overview ...... 54 Figure 8.2 - Tire Labelling Status by Region ...... 57 Figure 9.1 - Regional HS281122 Trade Balances for 2019 ...... 63 Figure 9.2 - Africa HS281122 Trade Balance 2015 to 2020...... 64 Figure 9.3 - Africa: South Africa HS281122 Import from Global (FOB) 2015 to June 2020 ...... 64 Figure 9.4 - China HS281122 Trade Balance 2015 to 2020 ...... 65

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 6 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Figure 9.5 - China HS28112290 Import from Global (CIF) 2015 to 2020 ...... 65 Figure 9.6 - China HS28112290 Export to Global (FOB) 2015 to 2020 ...... 66 Figure 9.7 - CIS HS281122 Historic Trade Balance 2015 to 2020 ...... 67 Figure 9.8 - Europe HS281122 Historic Trade Balance 2015 to 2020 ...... 68 Figure 9.9 - Europe HS281122 Import from Global (CIF) 2015 to 2020 ...... 68 Figure 9.10 - Europe HS281122 Export to Global (FOB) 2015 to 2020 ...... 69 Figure 9.11 - India HS281122 Historic Trade Balance 2015 to 2020 ...... 70 Figure 9.12 - India HS281122 Import from Global (CIF) 2015 to 2020 ...... 70 Figure 9.13 - India HS281122 Export to Global (FOB) 2015 to 2020 ...... 71 Figure 9.14 - Middle East HS281122 Historic Trade Balance 2015 to 2020 ...... 72 Figure 9.15 - Middle East: Turkey HS281122 Import from Global (CIF) 2015 to 2020 ...... 72 Figure 9.16 - Middle East: Turkey HS281122 Export to Global (FOB) 2015 to 2020...... 73 Figure 9.17 - USMCA HS281122 Historic Trade Balances 2015 to 2020 ...... 74 Figure 9.18 - USMCA: USA HS28112250 Import from Global (CV) 2015 to 2020 ...... 74 Figure 9.19 - USMCA: USA HS28112250 Export to Global (FOB) 2015 to 2020 ...... 75 Figure 9.20 - USMCA: Canada HS281122 Imports from Global (FOB) 2015 to 2020 ...... 75 Figure 9.21 - North Asia HS281122 Historic Trade Balance 2018 to 2020 ...... 76 Figure 9.22 - North Asia: Japan HS281122 Import from Global (CIF) 2015 to 2020 ...... 77 Figure 9.23 - North Asia: Japan HS281122 Export to Global (FOB) 2015 to 2020 ...... 77 Figure 9.24 - North Asia: South Korea HS281122 Export to Global (CIF) 2015 to 2020 ...... 78 Figure 9.25 - North Asia: South Korea HS281122 Import from Global (CIF) 2015 to 2020 ...... 78 Figure 9.26 - North Asia: Taiwan HS281122 Import from Global (CIF) 2015 to 2020 ...... 79 Figure 9.27 - North Asia: Taiwan HS281122 Export to Global (FOB) 2015 to 2020 ...... 79 Figure 9.28 - North Asia: Thailand HS28112210 Imports (CIF) 2015 to 2020 ...... 80 Figure 9.29 - North Asia: Thailand HS28112290 Imports (CIF) 2015 to 2020 ...... 80 Figure 9.30 - North Asia: Thailand HS28112210 Export to Global (FOB) 2015 to 2020 ...... 81 Figure 9.31 - North Asia: Thailand HS28112290 Export to Global (FOB) 2015 to 2020 ...... 81 Figure 9.32 - LATAM's HS281122 Historic Trade Balance 2015 to 2020 ...... 82 Figure 9.33 - South Asia's HS281122 Historic Trade Balance 2015 to 2020 ...... 83 Figure 9.34 - South Asia: Indonesia HS281122 Imports (CIF) 2015 to 2020 ...... 84 Figure 9.35 - South Asia: Indonesia HS281122 Exports (FOB) 2015 to 2020 ...... 84 Figure 9.36 - Average Import Values for Selected Regions/Countries 2015 to 2020 ...... 85 Figure 9.37 - Average Export Values for Selected Regions/Countries 2015 to 2020 ...... 85 Figure 11.1 - China: Average Delivered Price for Reference Grades 2015 to 2019 ...... 98 Figure 11.2 - Europe: Average Delivered Price for Reference Grades 2015 to 2019 ...... 99 Figure 11.3 - USMCA: Average Delivered Price for Reference Grades 2015 to 2019 ...... 100

List of Tables

Table 2.1 - RCCL Rubber Type Supply Demand Balance 2015 to 2040 ...... 15 Table 3.1 - Definitions, Abbreviations and Nomenclature ...... 17 Table 3.2 - Precipitated Silica Types and Definitions ...... 19 Table 4.1- Future Year Projections ...... 25

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 7 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table 4.2 - Tire Parameters ...... 27 Table 6.1 - Top 5 Manufacturers by 2019 Capacities 2015 to 2040 ...... 35 Table 6.2 - Summary of Recent & Future Capacity Changes ...... 36 Table 6.3 - Global Manufacturing Capacities All Types 2015 to 2040 ...... 37 Table 6.4 - RCCL Estimated Global Manufacturing Capacity for Rubber Types 2015 to 2040...... 37 Table 6.5 - Regional Manufacturing Capacities All Types 2015 to 2040 ...... 38 Table 6.6 - RCCL Estimated Regional Manufacturing Capacities for Rubber Grades 2015 to 2040 ...... 38 Table 6.7 - European Manufacturing Capacities (All Types) by Country 2015 to 2040 ...... 39 Table 6.8 - Middle Eastern Manufacturing Capacities (All Types) by Country 2015 to 2040 ...... 39 Table 6.9 - USMCA Manufacturing Capacities (All Types) by Country 2015 to 2040 ...... 39 Table 6.10 - North Asian Manufacturing Capacities (All Types) by Country 2015 to 2040...... 40 Table 6.11 - LATAM Manufacturing Capacities (All Types) by Country 2015 to 2040 ...... 40 Table 6.12 - South Asian Manufacturing Capacities (All Types) by Country 2015 to 2040...... 40 Table 6.13 - Chinese Manufacturing Capacities (All Types) by Province 2015 to 2040 ...... 41 Table 6.14 - US Manufacturing Capacities (All Types) by State 2015 to 2040 ...... 41 Table 6.15 - Manufacturers and Financial Segments used for Analysis ...... 42 Table 6.16- Summary of Current Product Offerings for the Top 4 Manufacturers ...... 48 Table 7.1 - TBR and LT Tire Production Growth 2015 to 2040 ...... 52 Table 7.2 - Tire Production Growth for Other Commercial Tires 2015 to 2040 ...... 52 Table 8.1 - Manufacturer's Tier Level ...... 56 Table 8.2 - Tire Company Sustainable Targets (Most Recent Publication) ...... 58 Table 8.3 - Top Tier Manufacturers' Eco Labelled Tire Examples (non-exhaustive) ...... 59 Table 10.1 - Global Demand All Silica Types 2015 to 2040 ...... 86 Table 10.2 - Global Demand for STS and HDS 2015 to 2040 ...... 86 Table 10.3 - Global Demand for HDS Types 2015 to 2040 ...... 87 Table 10.4 - Global Demand for CTS Types 2015 to 2040...... 87 Table 10.5 - Regional Demand All Silica Types 2015 to 2040 ...... 88 Table 10.6 - Regional Demand for HDS 2015 to 2040 ...... 89 Table 10.7 - Regional Demand for STS 2015 to 2040 ...... 90 Table 10.8 - Regional Demand for HDS LSA 2015 to 2040 ...... 91 Table 10.9 - Regional Demand for HDS MSA 2015 to 2040 ...... 91 Table 10.10 - Regional Demand for HDS HSA 2015 to 2040 ...... 92 Table 10.11 - African Country Volumes All Types 2015 to 2040 ...... 93 Table 10.12 - CIS Country Volumes All Types 2015 to 2040 ...... 93 Table 10.13 - European Country Volumes All Types 2015 to 2040 ...... 94 Table 10.14 - Middle East Country Volumes All Types 2015 to 2040 ...... 94 Table 10.15 - USMCA Country Volumes All Types 2015 to 2040 ...... 95 Table 10.16 - North Asia Country Volumes All Types 2015 to 2040 ...... 95 Table 10.17 - South America Country Volumes All Types 2015 to 2040 ...... 95 Table 10.18 - South Asia Country Volumes All Types 2015 to 2040 ...... 96 Table 12.1 - Global Market Value All Types 2018/19/30/40 ...... 101 Table 12.2 - Global Market Value by Type 2018/19/30/40 ...... 101 Table 12.3 - Global Market Value by HDS Subtype 2018/19/30/40 ...... 101

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 8 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table 12.4 - Regional Market Value All Types 2018/19/30/40 ...... 102 Table 12.5 - Regional Market Value STS 2018/19/30/40 ...... 102 Table 12.6 - Regional Market Value HDS 2018/19/30/40 ...... 103 Table 13.1 - Global Demand vs Capacity 2015 to 2040 ...... 104 Table 13.2 – Demand vs Capacity for Africa 2015 to 2040 ...... 104 Table 13.3 – Demand vs Capacity for China 2015 to 2040 ...... 105 Table 13.4 – Demand vs Capacity for CIS 2015 to 2040 ...... 105 Table 13.5 – Demand vs Capacity for Europe 2015 to 2040 ...... 105 Table 13.6 – Demand vs Capacity for India 2015 to 2040 ...... 106 Table 13.7 – Demand vs Capacity for Middle East 2015 to 2040 ...... 106 Table 13.8 – Demand vs Capacity for USMCA 2015 to 2040 ...... 107 Table 13.9 – Demand vs Capacity for North Asia 2015 to 2040 ...... 107 Table 13.10 – Demand vs Capacity for LATAM 2015 to 2040 ...... 107 Table 13.11 - Demand vs Capacity for South Asia 2015 to 2040 ...... 108 Table 15.1 – Tire Types and Subtypes ...... 110

List of Equations

Equation 1 - OE Growth ...... 28 Equation 2 – OE Utilisation Current Year ...... 28 Equation 3 – RP Growth ...... 28 Equation 4 - GDP Adjuster ...... 28 Equation 5 - RP Utilisation Current Year ...... 28 Equation 6 - Historic Utilisation ...... 29 Equation 7 - Projection I Total Available Volumes ...... 29 Equation 8 - Projection III Best Estimate Actual Market Volumes ...... 29 Equation 9 – Rubber Chemical Weighted Average Delivered Price ...... 30

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 9 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

2 EXECUTIVE SUMMARY

This summary details precipitated silica volumes in kMT (thousands of metric tonnes) and values in MM$ (millions of United States Dollars, USD).

2.1 SCOPE Precipitated Silica: Precipitated silica used in the tire market covering highly dispersible silica (HDS) and standard silica (STS). HDS is also split into three groups, low surface area (LSA), medium surface area (MSA) and high surface area (HSA). Chemically treated silica (CTS) is estimated as a proportion of total by alternative methods.

Manufacturers: Manufacturers of precipitated silica for use in tires.

Markets: The tire market including main tire types and subtypes.

Geographies: This report covers the global furnace carbon black industry, the global geographies are split into 10 regions: Africa, China, CIS, Europe, India, Middle East, North America, North Asia, South America and South Asia. Each region is subdivided into the appropriate countries.

Time Frame: Years 2015 to 2040.

Market Volumes: Volumes for 2015 to 2019 are modelled and adjusted to an average value from a range of industry sources, volumes for 2020 to 2040 are projected using stated modelling techniques.

Market Values: Market values for the years 2018, 2019 with projected values based upon the respective yearly volume estimate, segment mix and 2019 price.

Historic Regional Pricing: For STS, MSA HDS and HSA HDS based on confidential sources and RCCL estimates.

2.2 OBJECTIVES The key report objectives are as follows:

 Provide an overview of the precipitated silica industry relating to the tire market.  Provide market insight for the tire precipitated silica market.  Analyse precipitated silica manufacturer costs and selling prices.  Analyse trends in international trade.  Estimate market volumes for tire precipitated silica.  Estimate market values for tire precipitated silica.  Estimate the tire proportion of industry utilisation.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 10 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

2.3 MARKET DRIVERS Figure 2.1 - Tire Precipitated Silica Market Drivers

COVID*** is ****** an ********** impact ** a ****** of *** key ******* for **** precipitated ****** demand. Short*term ********** to ********** production *** vehicle *** is ********* tire ***** and ********* underlying ******** demand. This ********** was *********** during *** first **** of **** and ** set ** continue **** early ****. It ** anticipated **** vehicle *** may ******** for *** remainder ** **** *** into **** due ** reluctance ** use ****** transport* this **** have * positive ****** on *********** tire ***** and ******** demand. Longer*term ******* include ** increasing ****** adoption ** new ********** in *** automotive ****** due ** manufacturers *********** assets *** manufacturing **********. The ****** adoption ** electric ******** (***) will have * positive ****** on ****** as ***** for *** require ********* rolling ********** which ** best ************ with *** aid ** precipitated ******.

Mobility ********** include ****** of ******* ownership* especially ** APAC* leading ** organic ****** for **** materials. Following * drop ** global **** demand ** ****, *** outlook ** positive *** tire ****** growth. This ****** is **** accompanied ** a ********** to ****** tires *** to *** increasing ********** of ****. These *******, as **** as ******* in ******* mix *see *** below* will ********** demand *** precipitated ******.

Legislative * Environmental ****** include **** labelling* energy *** and **************. Tire ********* is * clear ****** to ******** of *** rolling ********** compounds ********** precipitated ****** creating ** accelerating ****** in *** materials’ ********. Leading **** manufacturers ********* that * tire ******** over **% of *** lifecycle ****** during ***, therefore ********* of ****** in *** through *** rolling ********** is * key ****** of *********** and ************* strategy. Fuel ********** in *** OE ******* segment ** also * key ******, new *********** for ***** tires *** also ******* potential *** increased ****** related ************ for ********** vehicles.

High ***** Added ******** are ******* to ******** additional ******** for ******** silica ***** it *** aid ** the ******* of ******** properties. Examples ** this *** winter* all*season *** all*weather ***** which *** have ****** speed ******* versus ******* counterparts ** the ****. This ***** is **** important **** respect ** average **** size **** a ****** driver ** larger ********, lower ****** in **** value **** subtypes. Developments ** the ******* vehicle ****** include ******* use ** radial ******* tires *** OTR ***** in ***** to **** increasing ****** demand **** as ***** rating.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 11 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Automotive ********** changes ******* development ** EVs* the **** of ******** for ***** vehicle ***** is ****** to ********** in *** coming *****. EVs ********* require ***** with ****** optimised ******* resistance *** which ************ silica ** a *** material. This ****** is ********* likely ** accelerate ****** adoption ** tire ******, especially ** China ***** is ******* EV **********.

2.4 MARKET DEMAND Figure 2.2 - Global and Regional Demand All Types 2015 to 2040

Global *** regional ***** for *** types ** precipitated ***** are ***** in ****** *.*. **** **** demand *** estimated ** **** *** compared ** forecast **** demand ** **** *** which ** a **.*% YoY *****. CAGR *** ****/** was *.*%, CAGR for ****/** is ***** at *.*%, the **** is **** from ****/** at *.*% due ** the ** **** ***-** reduction. The **** expansion ** demand *** China ** notable.

Figure 2.3 - Global and Regional Demand HDS Types 2015 to 2040

Global *** regional ******* for *** types *** presented ** Figure *.*. **** ****** demand *** estimated ** **** *** compared ** forecast **** demand ** **** *** which ** a **.*% YoY *********. CAGR *** ****/** was *.*%, CAGR for ****/** is ******** at *.*%, the **** is ****** from ****/** at *.*% due ** the ***** **** *****-** reduction. The ***** expansion ** demand ** China ** notable.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 12 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Figure 2.4 - Global and Regional Demand STS Types 2015 to 2040

Global *** regional ******* for *** types *** presented ** Figure *.*. **** ****** demand *** estimated ** *** *** compared ** forecast **** demand ** **** *** which ** a **.*% YoY *********. CAGR *** ****/** was *.*%, CAGR for ****/** is ******** at *.*%, the **** is ****** from ****/** at *.*% due ** the ***** **** *****-** reduction.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 13 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

2.5 MARKET VALUES

Figure 2.5 - Market Values for All Types 2015 to 2040

Global *** regional ****** values *** all ************ silica ***** are ********* in ****** *.*. **** ****** market ***** was ********* at **** MM** which ** a *.*% reduction **** ****. The **** market ***** (******** prices) ** estimated ** **** **$.

Figure 2.6 - Market Values for HDS Types 2015 to 2040

Global *** regional ****** values *** HDS ***** are ********* in ****** *.*. **** ****** market ***** was ********* at **** MM** which ** a *.*% reduction **** ****. The **** market ***** (******** prices) ** estimated ** **** **$.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 14 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Figure 2.7 - Market Values for STS Types 2015 to 2040

Global *** regional ****** values *** STS ***** are ********* in ****** *.*. **** ****** market ***** was ********* at *** MM* which ** a **.0% reduction **** ****. The **** market ***** is ********* at *** MM*.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 15 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

2.6 INDUSTRY OUTLOOK

Figure 2.8 - Rubber Grade Production Capacity Growth 2015 to 2025

RCCL ********* global ********** capacities *** rubber ***** precipitated ****** are ********* in ****** *.*. The **** capacity ** estimated ** **** *** having * CAGR ** *.*% from ****. There ** a *.*% increase ** capacity **** ****/** and a ******** CAGR ****/** of *.*%. These ********** represent ***** one ** publically ********* capacities* Chinese ******** expansions *** not **** defined.

Table *.* presents **** estimates *** global ****** demand *******. Utilisation ******* suggest **** global ******** becomes ***** post ****. It ****** be ***** that ***** has * significant ******** surplus* this ***** that ****** and ****** balances ** region ****** be ********** for **** granularity. This *** be ****** in ******* **.

Table 2.1 - RCCL Rubber Type Supply Demand Balance 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** **** **** **** **** **** **** **** ****** *** **** **** **** **** **** **** **** Tire Market Demand **** **** **** **** **** **** **** Utilisation ***** ** ** ** ** ** ** ** % ****** ** ** ** ** ** ** ***

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 16 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

The following key points can be made regarding industry outlook:

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Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 17 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

3 INTRODUCTION

This section provides the framework for this market research report. Definitions and scope provide critical components necessary for a clear understanding of the report and conclusions. The objectives provide the building blocks for the market report. Information sources allow the user to understand the level of detail and reliability of the data.

3.1 DEFINITIONS, ABBREVIATIONS AND NOMENCLATURE Definitions, abbreviations and nomenclature are provided in Table 3.1.

Table 3.1 - Definitions, Abbreviations and Nomenclature

Item Definition/Description 3PMSF The Three Peak Mountain Snowflake label found on winter tires and all weather tires. Africa The African region – all countries on the African continent. AS All Season tire type. This covers tires with M+S tire labelling. AW All Weather tire type. This covers tires designed for all weathers which includes snow performance. These tires have the 3PMSF label indicating measurable and standardised snow and low temperature performance. CARB California Air Resource Board Regulation. CIS CIS Countries plus countries outside of the Europe and EFTA. (Albania, Armenia, Azerbaijan, Belarus, Bosnia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Montenegro, Russia, Serbia, Tajikistan, Ukraine, Uzbekistan) Eco Eco tires represent tires manufactured in energy and resource efficient factories. These tires typically incorporate a proportion of sustainable materials and also provide environmental credentials through low rolling resistance. In the case of truck tires there is also significant importance placed on retreading and case life. EFTA European Free Trade Association. EPA USA Environmental Protection Agency. Europe Countries of the European union plus EFTA. GTRCDB© RCCL’s Global Tire & Rubber Chemicals Database. HDS High dispersible silica. This is silica is manufactured with morphology tailored to achieve uniform dispersion. This is typically also associated with a suitable physical form for easy dispersion, the best known being micro-pearl beads (Solvay). HP High Performance tire. These are tires with speed ratings of H and V. HSA High surface area. For this report > 180 m2/g. HVA High Value Goods. India Mainland India. INCO Intercontinental trading terms. LATAM Latin America (South America, Central America) Excluding Mexico LFY Last full completed year. For market reports this is the last full year which can be benchmarked against RCCL’s range of confidential market volume information. LRR Low rolling resistance. LSA Low surface area. For this report < 140 m2/g.

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LT Light Truck tire. Tires for commercial vehicles <3.5MT. Middle East Countries around the Persian Gulf. (Afghanistan, Bahrain, Iran, Iraq, Israel, Jordon, Kuwait, Lebanon, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Turkey, Turkmenistan, United Arab Emirates, Yemen) MSA Medium surface area. For this report > 140 m2/g and < 180 m2/g. MT Metric Tonne. M + S Mud and snow label. This label is not a rigorous performance standard and only applies within a manufacturer and range of tires. It is typically indicative of a tread design allowing for better handling in adverse conditions, it does not necessarily indicate low temperature performance. N. America USMCA countries (Canada, Mexico and United States). N. Asia Countries around mainland Asia. (Bangladesh, Bhutan, Cambodia, Japan, Laos, Mongolia, Myanmar, Nepal, North Korea, South Korea, Taiwan, Thailand, Vietnam) NR Natural Rubber OE Original equipment (new vehicle production). pa Per annum. PC Passenger car. Precedence RCCL’s tire allocation method. AW > WT > UHP > HP > ECO > Others. RCCL Rubber Chemical Consultants Ltd. RP Replacement market (components serving the used car market) S. America Countries of central and South America. S. Asia Countries separate from mainland Asia. (Australia, Brunei, East Timor, Fiji Islands, Indonesia, Malaysia, New Zealand, Philippines, Samoa Islands, Singapore, Solomon Islands, Sri Lanka, Tonga, Vanuatu) S-HDS Semi-highly dispersible silica. This is silica manufactured with a tailored morphology for easy dispersion but with standard physical form (e.g. granular). For the purposes of this report S-HDS and HDS have been combined and analysed as one entity. SM Summer Tire. For the purposes of this report summer tires are budget tires with S & T speed ratings. Other summer performance tires are accounted for in the HP and UHP types. SM – LRR Summer Low Rolling Resistance tire. These tires are early generation low rolling resistance tires, or budget low rolling resistance tires. STS Standard Precipitated Silica – also known as conventional precipitated silica. This silica is not classified as highly dispersible and is manufactured using older technologies regarding morphological composition and physical form. SUV Sports utility vehicle or similar type. TD Tangent delta. The ratio of dynamic loss modulus to dynamic elastic modulus. Touring Touring tires are typically designed with comfort in mind. These tires cross a range of performances from budget (typically AS) through to UHP. TR Truck Radial. Tires for vehicles >3.5MT. UHP Ultra-High Performance tire. These are tires with speed ratings > V. WT Winter tires. Winter tires are tires with the 3PMSF designation (Europe and North America) and also designated winter tires in North Asia (Japan and South Korea). YoY Year-on-year.

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3.2 SCOPE Rubber Chemical: Precipitated silica used in the tire market. The precipitated silica market for tires can be subdivided by silica types. The types covered in this report are defined in Table 3.2. CTS is estimated as a proportion of total by alternative methods.

Table 3.2 - Precipitated Silica Types and Definitions

Type Subtype Definition HDS LSA Low surface area (<140 m2/g) highly dispersible silica of all physical forms (micro- pearl and granular) MSA Medium surface area (>140 m2/g and <180 m2/g) highly dispersible silica of all physical forms (micro-pearl and granular) HSA High surface area (>180 m2/g) highly dispersible silica of all physical forms (micro-pearl and granular) STS Standard (conventional) precipitated silica of all surface areas and forms CTS Chemically treated precipitated silica of all types and forms Manufacturers: Manufacturers of precipitated silica for use in tires.

Markets: The tire market including main tire types and subtypes. The breakdown of the tire market is provided in the Appendices, Section 14.1.

Time Frame: Years 2015 to 2040.

Market Volumes: Volumes for 2015 to 2019 are modelled and adjusted to an average value from a range of industry sources, volumes for 2020 to 2040 are projected using stated modelling techniques.

Market Values: Market values for the years 2018, 2019 with projected values based upon the respective yearly volume estimate, segment mix and 2019 price.

Historic Regional Pricing: For STS, MSA HDS and HSA HDS based on confidential sources and RCCL estimates.

3.3 OBJECTIVES The key report objectives were:

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3.4 INFORMATION SOURCES

Primary Sources

Tire & rubber chemical company confidential contacts covering a broad range of disciplines (e.g. technical, commercial, marketing, production).

Knowledge gained via industry participation – no confidential information is presented.

Consultation for a range of clients on market and technical issues, enables extensive industry interaction and ensures up to date knowledge. Active consultations include carbon black companies, tire companies, rubber chemical companies, petrochemical companies, investment institutions and technology start-ups. While confidential information is not used directly in reports, information is used to benchmark and fine tune the reporting system providing realistic volume estimates via real life volume and technology benchmarking.

Secondary Sources

 Company annual reports & news feeds.  Company web sites.  Industry journals.  Government websites.  Industry association journals and websites.  Patent reviews.  Industry conferences and papers.

Global Tire & Rubber Chemicals Database (GTRCDB©)

The GTRCDB© is a proprietary database and reporting system designed specifically to gather and process market information relating to companies active in material compounding. This database is constantly fed information relating to tire, rubber and plastics compounding activities. Bespoke reporting tools allow flexible reporting of past, present and future market requirements for individual compounding ingredients. This is complimented by an extensive repository of chemical manufacturer information.

3.5 ASSUMPTIONS RCCL tries wherever possible to rely on fact based analysis. Much of the underlying analysis via the GTRCDB© uses factual information gathered over many years from reliable sources. In order to provide a full market picture of a complex segment it is always necessary to make assumptions. Wherever possible RCCL will make these clear by making a comment in bold red. This type of annotation will be present in the methodology section (Section 4) as well as within the market volume (Section 9) and values (Section 10) sections.

RCCL’s centrally controlled market analysis system allows alternative scenarios to be run. Clients wishing to adjust any of the stated assumptions can arrange for further analysis at an additional agreed fee.

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4 METHODOLOGY

This section explains the principles behind the generation of rubber chemical market volumes. Section 4.1 introduces a high level view of the ‘consumer-up’ approach. Section 4.2 discusses the framework for the ‘consumer-up’ approach with Sections 4.3 detailing segment specifics for Tires.

4.1 GENERAL REPORTING PRINCIPLES A key concept of the methodology used is that of consumer driven demand using ‘Consumer Up’ analysis. A high level view of the approach is presented in Figure 4.1. This shows that in order to evaluate the market an understanding of product mix, product technology and production capacity is required. Further to this, it is also necessary to adjust production capacity for market demand. All of these aforementioned factors are bound by time and geography. Time in this case represents shifting product mixes, market demands and associated production capacities, whereas geography represents additional regional constraints/opportunities related to legislation and megatrends.

Figure 4.1- 'Consumer-Up' Market Analysis

4.2 CONSUMER-UP ANALYSIS RCCL’s ‘Consumer up’ methodology is based upon analysis of individual rubber chemical consumers at the plant level. Each plant is allocated to a region, country and, as appropriate, state. Analysis is then done by iterating through all plants for each of the required years. This plant level analysis is coupled with market driven product and technology changes which allows a significantly more granular reporting approach versus other market volume assessment methods.

This is explained in more detail in the following sections.

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4.2.1 Key Parameters RCCL has determined all the key parameters (these parameters can also be considered as variables) associated with a robust and meaningful analysis of the rubber chemical market. The reporting system is built to reflect ‘real-life’ usage based upon individual production plant output. This output can be broken down into product constructions with associated components and compound formulations.

4.2.2 Consumer Plant Parameters Parameters related to consumer plants are highlighted in Figure 4.2.

Figure 4.2- Consumer Plant Parameters

The following information is regularly updated for each consumer plant from a range of different industry sources:

Yearly production capacity at the plant level.

Yearly product splits at the plant level.

Intelligence information relating to future production and product developments.

Changes in ownership or transfer of assets.

4.2.3 Product Technology Parameters Parameters related to products are highlighted in Figure 4.3. Product technology parameters are dependent upon time as well as region. Time dependency is evident especially in shifting sizes and underlying compound formulations (chemicals). Regional dependency is evident in both shifting sizes as well as compositions, with increased sensitivity to chemical composition on a regional basis due to a number of differing drivers.

The following product information is regularly updated and applied to the appropriate consumers based on a range of industry sources:

Yearly product technology changes (construction based).

Yearly product compound changes (material based).

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Introduction of differentiated product sub categories.

Regional product shifts (e.g. tire sizes in each sub category).

Figure 4.3 - Product Technology Parameters

4.2.4 Market Parameters Top level parameters relating to market demands are presented in Figure 4.4. These market parameters are used to create a range of possibilities for future market volume outlooks via the use of incremental changes to product split and technologies. When potentially disruptive drivers are considered (e.g. potential legislation changes) the analysis can vary demands based on predicted splits versus publically stated developments.

The following market information is regularly updated and applied to generate the appropriate utilisation rates based on maximum production capacities:

Past, present and future product unit production.

Economic indicators & drivers, industry specific and IMF based regional and country forecasts.

Tire company market assessments.

Industry market assessments from a range of different sources.

Upcoming regional legislative drivers.

Regional influences on specific sub segments.

Individual consumer responses to market changes and requirements.

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Figure 4.4- Market Utilisation Parameters

4.2.4.1 Historic Values The RCCL reporting system uses market models to adjust the manufacturing capacities to actual market volumes. These are explained in Section 4.3. Historic values include values from the start year (2011) to the last completed full year (LFY). These values utilise the market model plus a manual adjustment to bring regional figures in line with those found from research.

Specific tire sub-segment markets are better defined than others. For tire industry data, historic figures are adjusted to give overall regional balances for truck, light truck, SUV and PC tires. This is done by adjusting regions with well-defined tire production and/or market data first and then applying necessary adjustments to the remaining regions. Currently this means that North America, Europe, North Asia and India are adjusted first and the remaining regions are adjusted to give a global figure in agreement with research.

Market demand for rubber goods is not well documented, this means that the market model is applied from the start year (2011) with manual adjustments being made for specific sub-segment changes. Examples of specific changes relate to the mining and energy industries where performance may not track GDP values.

4.2.4.2 Future Projections Reporting years after the LFY can be projected in various ways, as shown in Table 4.1. The two most common projections (PI and PIII) are highlighted in bold.

Projection I gives an upper bound to market volumes based on the theoretical maximum production capacities.

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Projection III gives the most probable market volume based on the LFY capacity adjusted by forward market models as well as changing actual product splits. Actual splits are either reported plant product splits or those estimated by RCCL.

Table 4.1- Future Year Projections

Type Description I Demand based on total production capacity and actual splits for all years. II Actual demand to LFY. LFY projected by market model utilisation. III Actual demand to LFY. LFY projected by market model utilisation and YoY actual product splits. IV Actual demand to LFY. LFY projected by market model utilisation and YoY predicted product splits. V Actual demand to LFY. LFY capacity and utilisation fixed using actual product splits. VI Actual demand to LFY. LFY capacity and utilisation fixed suing predicted product splits.

4.3 MARKET VOLUMES FOR TIRE CHEMICALS Section 4.2 discussed the general principles for ‘Consumer-Up’ analysis. This section discusses Tire Segment specific details, adding additional levels of discrimination, in order to achieve results tailored to the Tire Segment.

4.3.1 Consumer-Up Analysis Cumulative experience gained from numerous global tire chemical research projects has led to the tire subtype splits which can be viewed in the Appendices – Section 13.1. These tire subtypes are allocated year-on-year to the individual tire manufacturing plants. An additional level of product discrimination required is the differentiation between OE tires and Replacement tires1. This differentiation is required because OE tires are the technology drivers in the market place, with newer technologies evolving from OE tires and then cascading down into the RP market.

In view of the above considerations the GTRCDB© model for Tires is extended from the general model according to the scheme outlined in Figure 4.5. This shows separation of product types by tire company tier level as well as product end use. The primary function of this scheme is to enable different component formulations for the different end uses e.g. OE versus RP and tire company tier levels.

The extended scheme works by allocating tire subtypes to each manufacturer plant YoY as detailed, these are the tire subtype splits by year (Syr). These subtypes utilise the Tier II/III constructions and formulations.

If the manufacturing plant produces OE tires then the appropriate allocation is split out from Syr with the residual allocated to RP, both allocations using Tier I/II constructions and formulations designated as application types (Ayr).

1 NOTE: the above scheme is currently used for PC, SUV, LT & TR tires only.

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Figure 4.5 - Extended Model for Tire Segment

Tire company tier level is as follows:

o Tier I . Companies with global reach and technology leadership and a broad range of tire types and/or sub types in the OE category o Tier II . Companies with brand recognition but more limited OE offerings typically technology followers o Tier III . Companies with mainly replacement and budget tire offerings RCCL tracks the following Tier I companies using brand analysis and other techniques:

Bridgestone, Michelin, Goodyear, Continental, Pirelli, Hankook, Kumho, Yokohama, Toyo, Sumitomo.

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4.3.2 Tire Parameters Tire parameters are derived from individual tire subtypes and application types. These are calculated year- on-year by combining tire sizes, constructions, components and formulations in order to derive appropriate parameters used in the plant level calculations.

The following parameters (Pyr) can be derived for tires:

Table 4.2 - Tire Parameters

Rubber Chemical Material Type Component Type or Chemical Group Mass/unit production Compound Tread Mass/MT product Textile Sidewall Mass/MT compound Steel … Mass/MM$ sales revenue

High Level Example - Determining a specific rubber chemical mass by tire unit production for a given tire sub type:

The tire sub type is programmatically constructed using a defined construction which consists of individual components, each of which has an underlying formulation. Regional sizes and formulations ensure appropriate dimensions and technologies which are varied YoY. The final result is the unit mass (MT) of rubber chemical per unit tire production for each year and region for the designated tire sub type

4.3.3 Tire Utilisations The GTRCDB© uses market utilisations to adjust tire plant manufacturing capacity to match market demand. The adjustments are made either as forward projected utilisations as described in Section 4.3.3.1 or as historic utilisations as described in Section 4.3.3.2. Utilisations are calculated for each tire sub type in a tire market group. A tire market group is made up of one or more tire sub types which are grouped together based upon market drivers and the need to differentiate market performance. Utilisation figures are derived for each of the 10 different regions in the GTRCDB©.

4.3.3.1 Projected Utilisations Projected utilisations for years after the LFY use a market model determined by tire type (e.g. PC, SUV, LT, TR etc.), subtypes and segment (OE or RP). Tire types PC, SUV, LT and TR have market models for OE and RP, other types (e.g. Agri, Aero, OTR etc.) follow a GDP based market model adjusted by historic and short- term outlooks for the type segment.

PC/SUV tire types have OE and RP models covering standard (S, T speed ratings), high performance (H and V speed ratings), ultra-high performance (W+ speed ratings), and winter tires. This allows the necessary market performance discrimination.

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OE: Growth is determined by regional YoY automotive production according to Equation 1. The utilisation for the current year is determined according to Equation 2 which combines the previous utilisation with the utilisation from the current year.

Equation 1 - OE Growth

Oc OE = (( ) − 1) Op

Equation 2 – OE Utilisation Current Year

UOEc = UOEp ∗ (1 + 푂퐸)

RCCL assumes that OE production is based in region of origin. Trade volumes are dealt with in the RP figures.

RP: Growth is determined by changes in the modelled regional parc replacement tire demand with a contribution from regional GDP if the economic outlook deteriorates. This is determined by Equations 3 and 4. These are combined to produce the RP utilisation for the current year as per Equation 5. The RP model is extended for China, Europe, India, North Asia and USMCA to include tire trade balances, this is not shown in the equations below.

Equation 3 – RP Growth

Rc 푅푃 = (( ) − 1) + Gadj) Rp

Equation 4 - GDP Adjuster

(Gp − Gc) If G < G Then G = − Else G = 0 c p adj 100 adj Equation 5 - RP Utilisation Current Year

URPc = URPp ∗ (1 + 푅푃)

RCCL assumes that RP production is for domestic and export. Trade balances for China, Europe, India, North Asia and USMCA are accounted for by an extended utilisation model. Other regions are adjusted using the manual model adjustment.

Definition of terms:

Oc Current year’s regional automotive production Gadj GDP adjuster Op Previous year’s region automotive production UOEc OE Utilisation rate for current year Rc Current year’s regional parc tire demand UOEp OE Utilisation rate for previous year Rp Previous Year’s regional parc tire demand URPc RP Utilisation rate for current year Gc Regional Real GDP for current year URPp RP Utilisation rate for previous year Gp Regional Real GDP for previous year

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RCCL utilises its proprietary automotive top-down model to verify longer term market demand, this ensures a global balance after adjusting for short-term disruptions or changes.

NOTE: The GTRCDB© uses additional proprietary calculations to adjust utilisation rates in order to remove organic manufacturing growth (which is not market growth). This is not detailed here, however it is an important step in the process of obtaining realistic market growth volumes. Additional growth in tire types and subtypes is derived from changes in manufacturing plant product splits. These splits are tracked on a YoY basis including proposed technology changes and product rationalisations.

4.3.3.2 Historic Utilisations Historic utilisations are those covering the years 2011 to the LFY. Utilisations are calculated as per Section 4.3.3.1 with the addition of a manual adjustment (Equation 5) which is used to bring results in line with actual regional and global totals. When years are completed, regional and global figures are compared to manufacturing information to ensure sensible regional figures and an overall global balance for production. This is currently done for TR, PC, SUV and LT.

Equation 6 - Historic Utilisation

푈ℎ푠푡 = 푈푐 ∗ (1 + 푀/100)

4.3.4 Reported Values Reported market values are derived according to the stated projections (definitions in Section 4.2.2). The two most frequently used projections are provided by Equations 6 & 7.

Equation 7 - Projection I Total Available Volumes

푦푓,푝=푛 푃퐼 = ∑ 퐶푆퐴푃 푦푠,푝=1

Equation 8 - Projection III Best Estimate Actual Market Volumes

푦푓,푝=푛 푃퐼퐼퐼 = ∑ 퐶푆퐴푃푈 푦푠,푝=1 Definition of terms: ys Start year S Plant percentage tire subtype split yf Finish year A Plant percentage application type split p Production plant P Parameter value C Plant production capacity U Utilisation rate

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4.4 MARKET VALUES FOR THE TIRE SEGMENT The global market value is obtained from the regional values. The determination of regional values is explained in the following section.

4.4.1 Regional Valuations Regional market value is determined from weighted average delivered prices. The global value is determined from the weighted regional market values.

Weighted delivered prices are determined for APAC, EMEA, NAFTA and SAM. This is done by generating an average weighted price based on regional material usage from underlying grade types. RCCL’s regions are then assigned based on the four top level regions. For example EMEA weighted prices are used for Africa, Europe and Middle East.

The weighted average delivered rubber chemical price Cwt is determined according to Equation 8.

Equation 9 – Rubber Chemical Weighted Average Delivered Price

푛 ∑푛=1 퐺푛푊푛 퐶푤푡 = 푛 ∑푛=1 푊푛 Where: G = Individual grade delivered price, W = grade weighting, n = number of grade types

4.5 DATA VALIDATION This section addresses the issue of data validation.

4.5.1 Market Volumes Market volume data is determined following the principles set out earlier in this section. Underlying compound formulations are adjusted by region, manufacturer tier, tire type, sub type and component (e.g. Europe – OE – PC – All Season – Tread). Formulations have been developed from 2009 onwards from a wide range of sources and have been validated for different groups of rubber chemicals (e.g. carbon black, precipitated silica, process oils etc.). Precipitated silica was incorporated into formulations starting with OE and then moving to tier I/II RP and finally RP tier III. This process was iterative with reports being run after each modification with crosschecks versus real life usage data from confidential sources (by tire manufacturing company).

Validation of other rubber chemicals along with real life validation of precipitated silica versus actual tire company usage provides a solid foundation.

4.5.2 Market Values Delivered prices were obtained from reliable confidential sources.

It should be noted that regional prices may vary due to material availability, contract volumes and the range of individual products within a product group. All prices were determined in US dollars.

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5 INDUSTRY OVERVIEW

This section provides an overview of the precipitated silica industry serving as an introduction to topics covered in more detail in later sections. Section 5.1 focuses on the raw material inputs, followed by process discussion in Section 5.2. The manufacturing landscape is covered in Section 5.3 with coverage of the key market segments in Section 5.4.

5.1 RAW MATERIALS The conversion of crystalline silica to amorphous silica requires a significant amount of energy as well as primary and secondary raw materials. The overall process is shown in Figure 5.1 which shows the raw materials to be sand, soda ash (sometimes sodium hydroxide is used), water and sulphuric acid. Depending upon the level of integration of the producer, the sodium silicate solution and sulphuric acid may be purchased from a third parties.

Figure 5.1 - Manufacturing Process for Precipitated Silica

5.2 MANUFACTURING PROCESS Referring to Figure 5.1, the key steps in the manufacturing process are as follows:

 ********** ** ******* ****** ******** o **** ** ********* **** ***** * ******* ******* *** per ***** ******) ***** **** *** **** *** *** ****** ** ****** ****** ** * ********** ***** **** *** ***** ******* ***** ********* **** ***** ********* ** * ************* ** **%.  ********** ** ******* ************ ****** o ************* ** **** ** ** ******** *********** ********** ******. *** ******* ** **, ***********, *************, ******** ***** *** ********* *** ******** ** *** ***** ******* ***************.  ******* *** ********* o ****** ******** ** * **-******* of *** ******** *** ** ******* ** ******* **** ***** ** ** ******** ***********, ****** **** ******* *** ****** ******* ** ********* ** **********.  ****** *** ******* *********

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 32 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

o *** ***** ******* ******** ******, *** ****** ********* **** *** ******* *** *** ***. **** ********* ******* *** ***** ******* **** ****** ***** **% ** *%.

The ************* process ******** significant ******* of ****** in *** formation ** the ****** silicate *** also ** the ****** process. The ************* process ** exothermic *** typically ******** limited ****** input.

Production ***** can **** widely ** capacity* it ******* that * ** ***** capacity *** be ********** as ** average *** a ********** line.

It **** be ********** that *** above ******** is * simplification ** the ****** process ********, each ** the ***** in *** process *in ********** the ************* process* offers *** possibility ** wide ******* variations ** process **********. For *** precipitation ***** additional ********* may ** employed ** give * higher ****** of ******* on *** final *******.

5.3 MANUFACTURING LANDSCAPE A complete breakdown of manufacturing capacities is provided in Section 6. The global spread of precipitated silica manufacturers can be viewed in Figure 5.2, this shows manufacturers and locations sized by total capacity at the start of 2020 (black) and expanded capacity by 2025 (red). It is immediately evident that China has a significant production volume relative to other regions. (A large scale version of Figure 5.2 with a key to manufacturer locations is available in the associated Excel workbook).

Solvay* Evonik *** PPG *** be ********** global ********* with ********** in ** least *** significantly ********* regions. Evonik’s ****** reach *** extended ********* with *** acquisition ** the ***** silica ******** in *** second **** of ****. On * production ******** basis *******, Madhu* Hengdian *** OSC* also **** high ******* while ********* in * single ****** or ************ regions.

* *** capacities *** not **** defined *** may ** higher **** stated.

In ************* of *** three ****** players*

Solvay ** seen ** the ******* in *** (*** Section *.*) production and ******** with **** participation ** the ******** goods ******* as ****.

Evonik* prior ** the ***** acquisition* was ******** driven ** the ******* segment **** a ***** on ****** and ******* applications. Huber **** positioned ******** in *** consumer ***** segment **** a ********** focus ** dental ************. These ********** were **** as ****** complementary *** a ******* force *** the ********* which ********* in * global ****** with * broader ****** reach ** all *** regions.

PPG *** seen ** be ****** in *** industrial ******* with * focus ** rubber *** coating ************.

Regarding ******** manufacturers* Quechen *** a ****** focus ** HDS ********, but **** has *********** capacity ********* to ****** goods *** the ******** segment. Madhu ****** a ******** range ** products ******** both **** segments. OSC *** a ****** position **** tire ******** and *** increased ******** in *** consumer ******* in ****** years. The ******** group *** a ****** focus ** HDS ********.

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Figure 5.2 - Global Map of Precipitated Silica Manufacturing Plants as of September 2020

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 34 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

5.4 KEY MARKET SEGMENTS Precipitated silica is used in a wide range of applications which can be broken down into 2 main groups:

 Industrial Applications o Tires o Rubber Goods o Coatings  Consumer Goods o Dental o Anti-Caking & Flow . Food Industry . Animal Feed & Nutrition o Specialist . Pharmaceutical . Filtration This report is focused on tire applications only, which fall within the industrial applications segment. The industrial segment includes products with broadly similar functional requirements. These industrial products have different requirements to those in the consumer goods segment. The consumer goods segment has a stronger focus on product purity, typically having products with highly application specific functionality.

It should be noted that fumed (pyrogenic) silica is also used in the rubber segment, primarily for liquid silicone applications.

Section 10 provides information regarding the tire market demand for precipitated silica.

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6 MANUFACTURERS

This section details manufacturers of precipitated silica covering key manufactures and manufacturing capacities for all markets as outlined in Section 5.4. RCCL’s tire market estimates are used to split out tire capacities from the total estimated installed capacity for precipitated silica (Sections 1 and Sections 12).

Care ** needed ** interpreting ************* capacities. Figures ******** are ***** a ********* of * number ** silica ******** such ** precipitated ******, silica ****, zeolites* pyrogenic ****** etc. RCCL’s ********* for ************ silica ********** account *** these ******. Where ******** is *** well *******, RCCL ********* use * standard ************ silica ********** line ****** of ** kMTpa.

Section 6.1 discusses the key manufacturers including a top 10 summary by capacity. Section 6.2 presents recent and future capacity changes. Geographical volume breakdowns for all manufacturers are provided in Section 6.3. RCCL tracks manufacturers’ financial figures and annual reports (where available), this analysis is presented in Section 6.4. Manufacturing developments are covered in Section 6.5 with product developments specific to the tire industry being covered in Section 6.6.

Note: All manufacturing capacities are presented in thousands of metric tonnes (kMT).

6.1 KEY MANUFACTURERS Table 6.1 presents the top 5 manufacturers by 2019 manufacturing capacity.

Table 6.1 - Top 5 Manufacturers by 2019 Capacities 2015 to 2040

Year ∆, % CAGR, % Company 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Evonik *** *** *** *** *** *** *** *.* * **.* *.* *.* *.* Solvay *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Quechen *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Madhu *** *** *** *** *** *** *** **.* ** *.* *.* *.* *.* PPG *** *** *** *** *** *** *** *.* * *.* *.* *.* *.*

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6.2 RECENT & FUTURE CAPACITY CHANGES Table 6.2 presents a summary of recent and future capacity changes. Yearly starting capacities are provided, along with estimated quarterly capacity increases. Notes for assumptions are provided below the table.

Table 6.2 - Summary of Recent & Future Capacity Changes

Notes & Assumptions * ******** increase ***** on ******** selling ******* for ****. * ********* start **** ** 2021, *******, this *** be ******* to *****. * ******** plant ********* in ****** is ******* to ***** in ****, post ***** delays. * ******* up ** volume ** Evonik’s ********** plant ** assumed ** be ******* due ** COVID. * ******* JV ***** in ***** Korea ** assumed ** start **** one ****. * ********* plant ** Thailand ** assumed ** be **** volume ** Marseille *****.

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6.3 MANUFACTURING CAPACITIES This section details total precipitated silica manufacturing capacities for all market segments. RCCL’s estimates for rubber type production is provided for the global and regional capacities.

Note: Phase I capacities for viable or ongoing projects are included, speculative capacity additions are excluded. Capacity increases in China may be understated, however, these are particularly difficult to define.

6.3.1 Global Global ********** for *** market ******** are ********* in ***** *.*. **** ******** was ********* to ** **** *** representing * ** *** (+*.2%) *** increase. CAGR *** the ****** ****/** was *.*%. Future ****** is ********* to ** lower* however* this **** be ******** largely ** developments ** China.

Table 6.3 - Global Manufacturing Capacities All Types 2015 to 2040

Year ∆, % CAGR, % Type 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Global **** **** **** **** **** **** **** *.* *.* *.* *.* *.* *.*

RCCL’s ********* global ********** for ****** market ******** are ********* in ***** *.*. **** ******** is ********* to ** **** *** representing * ** *** (+*.9%) *** increase. CAGR *** the ****** ****/** was *.*% which is ****** than *** figure *** all ****** segments ********** that ****** capacity ** a ****** driver. Future ****** is ********* to ** lower* however* this **** be ******** largely ** developments ** China.

Table 6.4 - RCCL Estimated Global Manufacturing Capacity for Rubber Types 2015 to 2040

Year ∆, % CAGR, % Type 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Global **** **** **** **** **** **** **** *.* *.* *.* *.* *.* *.*

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6.3.2 Regional Regional ********** for *** silica ***** are ********* in ***** *.*. China *** significantly ****** capacity ****** other *******. For **** Chinese ******** was **% of ***** global ********.

Table 6.5 - Regional Manufacturing Capacities All Types 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 China **** **** **** **** **** **** **** *.* * *.* *.* *.* *.* Europe *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* USMCA *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* India *** *** *** *** *** *** *** **.* ** *.* *.* *.* *.* N. Asia *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* LATAM ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* M. East ** ** ** ** *** *** *** *.* * *.* **.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

RCCL’s estimated regional capacities for rubber market segments are presented in Table 6.6.

Table 6.6 - RCCL Estimated Regional Manufacturing Capacities for Rubber Grades 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 China **** **** **** **** **** **** **** *.* * *.* *.* *.* *.* Europe *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* USMCA *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* India ** ** *** *** *** *** *** *.* * *.* *.* *.* *.* N. Asia *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* LATAM ** ** ** ** ** ** ** *.* * **.* *.* *.* *.* M. East ** ** ** ** ** ** ** *.* * *.* **.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

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6.3.3 Country Table *.* presents ******** manufacturing ********** by *******. Germany *** the ******* capacity ******** by ****** and **** Poland.

Table 6.7 - European Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Germany *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* France *** *** *** *** *** *** *** *.* * *.* **.* *.* *.* Poland ** ** ** ** ** ** ** *.* * **.* *.* *.* *.* Spain ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Netherlands ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Italy ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Finland ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Belgium ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

Table *.* presents ****** Eastern ************* capacities ** country. Turkey ** the **** manufacturing ******* in *** Middle ****.

Table 6.8 - Middle Eastern Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Turkey ** ** ** ** *** *** *** *.* * *.* **.* *.* *.*

Table *.* presents ***** manufacturing ********** by *******. The *** is *** only ************* country ** USMCA.

Table 6.9 - USMCA Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 USA *** *** *** *** *** *** *** *.* * *.* **.* *.* *.*

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Table *.** presents ***** Asian ************* capacities ** country. Manufacturing ********** are **** to ** distributed ********** evenly ****** the **** manufacturing *********.

Table 6.10 - North Asian Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Taiwan *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Thailand *** *** *** *** *** *** *** *.* * *.* **.* *.* *.* Japan ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* S. Korea ** ** ** ** *** *** *** *.* * *.* *.* *.* *.*

Table *.** presents ***** manufacturing ********** by *******. Brazil *** the ******* volume.

Table 6.11 - LATAM Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Brazil ** ** ** ** ** ** ** *.* * **.* *.* *.* *.* Venezuela ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

Table *.** presents ***** Asian ************* capacities ** country. Volume ** split ****** for **** countries *this ****** is *********).

Table 6.12 - South Asian Manufacturing Capacities (All Types) by Country 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Malaysia ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Indonesia ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Note: volumes are estimated.

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Table *.** presents ******* manufacturing ********** by ********. Fujian *** significantly ****** volume ****** other *********.

Table 6.13 - Chinese Manufacturing Capacities (All Types) by Province 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Fujian *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Shandong *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Anhui *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Jiangsu *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Jiangxi ** *** *** *** *** *** *** **.* ** **.* *.* *.* *.* Guangdong *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Hunan *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Tianjin ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Jilin ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Hebei ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Chongqing ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Shanxi ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

Table *.** presents ** manufacturing ******** by *****. Louisiana *** the ******* volume.

Table 6.14 - US Manufacturing Capacities (All Types) by State 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Louisiana *** *** *** *** *** *** *** *.* * *.* *.* *.* *.* Tennessee ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Illinois ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* S. Carolina ** ** ** *** *** *** ***.* * *.* **.* *.* *.* Ohio ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Maryland ** ** ** ** ** ** ** *.* * *.* *.* *.* *.* Pennsylvania ** ** ** ** ** ** ** *.* * *.* *.* *.* *.*

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6.4 FINANCIAL ANALYSIS This section analyses and compares financial results from publically listed manufacturers. Two global manufacturers (Evonik and Solvay) are compared for reportable segment results containing the precipitated silica business. Three Chinese manufacturers, also active in carbon black production, are analysed. The Chinese manufactures started precipitated silica production post 2011, the precipitated silica segment being the minor business segment in each case.

Companies and their respective segments are summarised in Table 6.16.

Table 6.15 - Manufacturers and Financial Segments used for Analysis

Company Segment Analysed Description Evonik Resource Efficiency Coating Additives, Cross linkers, High Perf Polymers, Silica. Solvay Advanced Materials Speciality Polymers/Chemicals, Composites, Silica Jiangxi Black Cat Silica Segment Precipitated Silica Only Longxing Silica Segment Precipitated Silica Only Jinneng Science Silica Segment Precipitated Silica Only

6.4.1 Global Manufacturers Figure *.* compares *** EBITDA ** sales ******* (**) ratio for ****** and ******. Solvay’s ******** Materials ******* has * higher ***** versus ******** resource ********** segment. This ********** is **** loose ******* only **% of ******** Advanced ********* segment ***** are ***** on ************ silica. Evonik’s ****** sales ********* for ************* **% ** sales ** the ******** Efficiency ******* prior ** the ***** acquisition.

Figure 6.1 - Evonik vs Solvay, EBITDA/Revenue

Solvay ********* segment ********* in ****, precipitated ****** is *** in *** Chemicals *******. Evonik ********* segment ********* in ****, precipitated ****** is *** in *** Smart ********* segment.

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Figure *.* presents ******** precipitated ****** sales ******* and ****** estimates *** Solvay ******* selling ******. This ***** a ***** to ***** average ******* over *** five **** period. This ********* in ******* reflects ** increasingly *********** market ***********.

Figure 6.2 - Solvay Estimated Average Selling Price 2015 to 2020 Q2

RCCL ******* estimates ***** on ********* sales ******* derived **** manufacturing ******** and ********* report **********.

6.4.2 Chinese Manufacturers Figure *.* compares ***** margin ** sales ******* for *** three ******* producers. This ********* lower ******* for *** Chinese ********* relative ** the ****** players.

Figure 6.3 – Gross Margin/Sales Revenue for Chinese Producers 2015 to 2019

Figure 6.4 presents half yearly gross margin to sales revenues for Black Cat and Longxing indicating the impact of COVID-19 for 1H 2020.

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Figure 6.4 – Half Yearly Gross Margin/Sales Revenue for Black Cat and Longxing 2015 to 2020

Figure 6.5 presents the average selling price for the Chinese manufacturers. The average prices are significantly lower than those estimated for Solvay (Figure 6.2).

Figure 6.5 – Selected Chinese Manufacturers Average Selling Price 2015 to 2019

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 45 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

6.5 MANUFACTURING DEVELOPMENTS Production volume changes were covered in Section 6.2. Other significant developments are as follows:

 *** ******** o ****** ****** ********* *** **** * *********** ****** ** ********** *** ************* ******: . *****: *** ********* *** ******* ***** ******* ************* *** ******* ** *** ********** ** ******* ***** *********. **** **** ***** *********** ******** ** *** ****** ****** *** ** ******* **** *****. . *****: **** ********* ******* *** ****** *** ************ *** *** ********* ********. ** ******** ******** *** **** ****** ****** ******** are *** **** ******* *******).  ********** ************ o *** ************ *********** ****** ** *** ****** *********** in ****) ** * ****** ****** *** ******* ************ ***** *** ******* ** ***** ***********, ****** ********* *** ******** **********. ************* **** ****** ****** **.g. ****** *****) **** ******* *** ****** **** ****, ***** ******* ***** ***, ******** *** *******.  ************** ******* o **** *** ************ *********** ******, ************** ******** *** **** ** * ********* *** ** ******** ****** *** **** ******. *** ******* *.*.  *********** ************ o ****-**** based ****** ******* ********* *** ********** ** ****** **** ******* *********** *** ******* ************** **********.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 46 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

6.6 PRODUCT DEVELOPMENTS This section details the past, present and future direction for precipitated silica used in tires.

6.6.1 Historic Developments The *********** of *** ‘****** tire concept ** Michelin **** in **** marked * step ****** in *** use *** driving ***** for *** adoption ** silica *** in *****. It ****** be **********, however* that ******** technology ************ silica *STS* was ** use *** specific **** types *** components **** before **** time.

STS ** typically ******** in ****** granular ** powder **** and ** used ** applications ******* from ***** tire ****** (***-marking), ***** treads *** OTR ****** with *********** in **** and ******** performance ***** the **** drivers *** the **** two *****.

STS *** also ** used ** improve *** performance ** dry ******* systems* this ** appropriate *** steel *** textile *********, in ********** the ***** breaker *skim* compound. The ******** choice ** system ** dependent **** a ********** manufacturer* tire **** and **** range.

Prior ** the ***** tire *******, the ******* silica ***** for ****** applications **** Evonik’s *** and *** products. With *** advent ** the ***** tire* Rhodia *Solvay* introduced ***** micro ***** technology ****** Zeosil ****** which *** be ********** the ***** HDS ****. The *** product ******* improvements ** processing* dispersion *** final *********** properties ******** silica ********** to ***** the *magic ********* of ******* resistance* wet **** and **** at *** expense ** traditional ****** black ***********. This **** change ** performance *** crucial ** further ************ in **** field.

6.6.2 Current Landscape STS is still used in the applications discussed in Section 7, with some replacement by HDS types based on processing, performance and cost considerations

Zeosil 1165MP remains an industry benchmark and is still used in substantial quantities today. Several factors have led to development of improved products these are (in no particular order):

 ******** **** ********* ************. o **** *** ****** ********** *********** ******* ** ****** *** ***** ****.  ********** ** *******. o ********** ************* **** ******** *** ******* ********** ******** ** ******** ** **** ************ ********* ***********.  ********** **** **** ************ *** ****** *********** ******. o **** ***** *** *** ***** *** ******** ************ **** ******* **** *********** ********* ** *** ***** *********** ******** ********** *** ***** ***********. *** ******* * *** **** *******.  ********* ***** ** **** * ************* ** **** ***** ********. o **** * **** ************* **** ** ********* ***** ** **** ***** ******** ***** *** ********* ************** ** *********** *******.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 47 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

 *********** ** ******** *********** ************ ** ***** ***** ************. o ******* ****** ***** ********* **** **** ********* ** ******** *** *********** *** ** ************* **** ********** ** *** ******* ******. **** ** * ***** *********** *** ***** **** ***** *****. The ******* product ********* are *** more ******* with * wide ***** of ********** product **********. Surface **** of ************ silica ******* a *** indicator ** anticipated *********** characteristics *inversely ************ to *** underlying ******* particle ****), however ***** are * wide ***** of ********** characteristics ***** are ********* to *** end ***********. These *************** include *and *** not ******* to* the *********:

 ************** **********. o ******* ********, *********, *********** *** **** ****.  ********* *********.  ******* ***** ************.  ******** ****. Each ** the **** manufacturers *********** in ******* *.* is active ** development ** HDS *** STS ******* types. Table *.** provides * summary ** the ******* current ******* offerings *** the *** * *************. This **** is *** exhaustive *** is ******** to **** the ***** of ******* development ********** by *** precipitated ****** manufacturers. The ***** choice ** grade **** be ***** upon * wide ***** of **************.

The *** of *** term *** can ***** some ****** of *********. A **** highly *********** silica ** clearly *** which ************ and ********* efficiently ** the ****** process *** which ******* the ************ post ******. There *** a **** range ** factors ***** affect ****, some *** product ***** (**********, physical form* and **** are ***** on *** capability ** the *** user *conveying *** mixing *********, mixing ******* employed* other *********** ingredients ********* silanes* compound *******).

Within *** range ** HDS ******** the *************** are **** primary ********** (********** and chemistry* as **** as ******** (**: Powder, **: Granular* MP* Spherical *****). Much *** be **** within *** primary ********** to ******* dispersion* hence ******** designated ** HDS* however *** physical **** can ** equally ********* in ***** achieve ********* dispersion.

CTS ****** chemically ******* silica* which *** typically ***-silanised ******** such ** Coupsil *Evonik* and *** more ******** introduced ****** (***).

The most recent developments are:

 ***** ******* *** ******** *** ****** ***** ************  **** ******* *** ******** *** **** *********** ***** ************  **** ******* *** ******** *** ***** ******

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 48 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table 6.16- Summary of Current Product Offerings for the Top 4 Manufacturers

Manufacturer Product Started Type NSA CTAB Solvay ***** ** 2017 HDS Solvay ******** **** *** */* */* PPG Industries ***** ***** ** *** *** *** Evonik Industries ******** **** ** *** *** Evonik Industries ******** **** ** *** *** *** Evonik Industries ******** **** ** **** *** *** *** Solvay ****** *** ** **** *** *** *** Quechen Silicon ****** *** ** *** *** *** Solvay **** **** ** *** *** *** Quechen Silicon ****** *** ** *** *** *** PPG ***** **** *** *** *** Evonik ******** **** ** **** *** *** *** Evonik ******** **** ** *** *** Evonik ******** *** ** *** *** Evonik ******** *** ** *** *** Evonik ******** **** ** *** *** *** Quechen Silicon ****** *** ** *** *** *** Quechen Silicon ****** *** ** *** *** *** Solvay ****** **** ** **** *** *** *** Quechen Silicon ****** *** ** *** *** *** PPG Industries ***** ***** ** *** *** *** Evonik ******** *** ** ***** *** *** Quechen Silicon ****** *** ** *** *** *** PPG Industries ****** *** ** **** *** *** *** PPG Industries ***** *** ** *** *** Evonik ******** *** ** *** *** Evonik ******** *** ** *** *** PPG ***** ****** *** *** *** Solvay ****** *** ** *** *** *** Quechen Silicon ****** *** ** *** *** *** Evonik ******** **** ** *** *** *** PPG Industries ****** *** ** **** *** *** *** Solvay ****** **** ** *** *** *** Quechen Silicon ****** *** ** *** *** *** Solvay ****** **** ** *** ** ** Quechen Silicon ****** ** ** *** ** ** PPG Industries ****** *** ** **** *** ** *** Evonik ******** *** ***** *** ** PPG Industries ***** *** ** *** **

Note: Evonik acquired Huber during 2017 resulting in some grade rationalisation, these are tentative above. Gray values are indicative only.

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6.6.3 Future Developments Regional ************ will ****** upon ****-trend *******, such ** population ******** which ****** tire ******* and ********* precipitated ****** volumes. In ******** to ****, regions **** mature **** labelling ******* will ******* increasingly ************** products ** meet *** challenges ** increasingly ********* regulations ** well ** changing ********** technology ************, such ** electric ********.

Current ******* developments ********* the *** segmentation ** products ** meet ******** requirements **** as ****** tire ***********. Further ******* sub ************ is ********* to **** more ******** tire **** needs* examples ** this *** all*weather ***** and ***** for ******** vehicles.

New ****** technologies* such ** liquid ***** mixing* may ********** the ****** of ****** in **** (***** in particular* as **** overcomes ********** challenges *** some **** companies.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 50 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

7 QUANTITATIVE MARKET DRIVERS

This section focuses on the tire market from a quantitative viewpoint. Historic, current and future unit tire production is analysed looking at tire types and subtypes providing the best compromise for differentiation of material requirements.

Note: All commentary relates to tire types and subtypes included in the report scope (Section 3.2). Also review Section 15 – Appendices for a comprehensive list of tire types and subtypes.

RCCL has estimated USMCA SUV content from reported PC and LT data, this is due to variation in vehicle definitions and reporting across regions.

Note: Tire units are presented in millions (MM) unless otherwise stated. Data may not reflect the most up-to-date market outlook due to COVID-19 uncertainties.

7.1 TIRE PRODUCTION BY TYPE In order to analyse precipitated silica it is necessary to break tire production into discreet units with similar material requirements. The technical reasons for this are discussed in Section 8. This section analyses tire types and subtypes looking at quantitative tire market trends and drivers.

7.1.1 Non-Commercial Vehicle Tires A ****** perspective *** the ******** totals *** non*commercial ***** (**, SUV, ** and ****) is ******** in ****** *.*. This ***** global *** regional **** unit ********* indicating ****** growth ********* COVID*** reduction ** ****. The ****** in *****, North **** and ***** is **** significant ** unit ****** giving *** following ******* for **** to **** unit ****** (**):

China ****) >> ***** (***) > North **** (***)

Tire ****** growth ** a ***** indicator ** increased ************ silica ******. Increased ****** will ****** from **** unit ******, increased ****** content *** increased ******* tire **** (*.g. PC ** SUV*.

Figure 7.1 - Tire Production Growth for All Non-Commercial Tire Types 2011 to 2040

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Tire **** growth ** tire **** is ********* in ****** *.*. This ***** the ********* ****/** ranking (**):

SUV ****) > ****** (***) > PC ****)

The **** growth ** SUV ***** is *********** as **** represents ***** of ****** average **** which ** a ************ indicator. Care ** required ***** this ***-level ******** as ** may *** provide ********** details ****** from ******* at ********** tire ********, for ******* different ****** grade *****. This ** the ****** why **** breaks **** production **** tire ********.

Figure 7.2 – Non-Commercial Tire Production Growth by Tire Type 2011 to 2040

An ******* of ******* analysis ** presented ** Figure *.* which ***** tire ********** evolution *** PC *** SUV *** AS *****. UHP ****** is ***** industry ******* with *********** growth *** SUV *****.

Figure 7.3 - PC and SUV UHP AS Tire Production Growth 2011 to 2040

Tire Allocation Precedence

RCCL’s system allocates tires based on the following priority:

** * ** * *** * ** * *** * ***** *** *****

Tire ******* offerings **** evolved ************* over *** last *** decades. One ** the ******* areas ** change *** been ********** between ********** (*.g. summer* winter* all ******) and **** speed ******* (*.g. H* V* W* Y* Z*. Historically *** highest ***** ratings **** typically ********** with ****** performance *****, more ******** there **** been ********* of ****** speed ******* across * much ******* performance ******** including **, AS *** WT *****.

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As ** example* A **** is ********* to *** WT ******** in ********** to *** underlying ***** rating* therefore * W ***** WT **** is ********* as * WT **** not * UHP ****.

Manufacturing Location versus Market Requirements

RCCL’s system tracks and benchmarks against tire production. This therefore means there may be a discrepancy between a region’s market requirements and material types relative to the market mix. This can be explained by manufacturing for export which is done either to maintain centres of competence (e.g. winter tire production, run flat or self-seal etc.) or for economic reasons such as manufacture in Thailand for export globally.

7.1.2 Commercial Vehicle Tires A ****** perspective *** TBR *** LT ********** tire ********** is ******** in ***** *.*. This ***** strong ****** following *** COVID*** reduction ** ****. The ****** values *** lower **** non*commercial *****, however* the ****** tire ******* and ********* for ********* silica ******** adds ************ to **** dataset.

Table 7.1 - TBR and LT Tire Production Growth 2015 to 2040

Tire Year ∆, % CAGR, % Type 2015 2019 2020 2025 2030 2040 19/20 15/19 20/25 25/30 30/40 LT *** *** *** *** *** *** *** *.* *.* *.* *.* TBR *** *** *** *** *** *** *** *.* *.* *.* *.*

Other ********** tires ** significance ******* IND* OTR *** AGR. Global ********** growth *** these ***** is ********* in ***** *.*. All ** these ***** have ********* for ********* silica ***. The ************ tire ****** has **** somewhat *******, however* all ***** of ***** tire ***** (********** radial) *** seen ** high ***** products. A ***** number ** tire ************* have ******** in *** and *** tire ******** in ****** years.

Table 7.2 - Tire Production Growth for Other Commercial Tires 2015 to 2040

Tire Year ∆, % CAGR, % Type 2015 2019 2020 2025 2030 2040 19/20 15/19 20/25 25/30 30/40 AGR ** ** ** ** ** ** *** *.* *.* *.* *.* IND ** ** ** ** ** ** ** *.* *.* *.* *.* OTR * * * * ** ** *** *.* *.* *.* *.* Note: this does not include low value small diameter Xply tires.

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8 QUALITATIVE MARKET DRIVERS

This section deals with tire market drivers influencing adoption and use of precipitated silica.

Note: Silica and precipitated silica can be understood to be the same material in the context used here.

8.1 HISTORICAL PERSPECTIVE Precipitated ****** has **** used ** tire ********* for **** decades. This *** was ********** to ********** low ******** of ******* * *** ** *** in ***** compounds *for **********) and ** bonding ********* (*** improved adhesion *** ageing **********). Michelin’s *********** of ** silica ***** compounds ** Europe ** the *** ****** initiated the ***** to ********* silica *******, which *** accelerated ** EU **** labelling *********** in ****. The *** due ** the **** that *** rolling ********** balanced **** wet **** and **** resistance *** only ******** by ********* carbon ***** with ************ silica ** the ***** compound*. Post ****, adoption ** additional **** labelling *********** in ***** regions **** accelerated **** change. Another ****** driver *** adoption ** the ********* balance ** performance ********* by ****** (****** carbon black* which ****** improvements ** low *********** grip ** well ** wet ****.

Adoption ** increased ******** of ****** in ***** treads *** been ******, due ** complications **** the ************ process ** the ******** of ******* rubber. Improved **********, along **** strong ****** drivers* is *** making ******* into **** area.

The ******* precipitated ****** scene *** tires ** therefore ************* more ******* than ** was **** ** ***** ago. This ** due ** market ************* partially ********* by *** precipitated ****** developments*.

1 It should be noted that performance optimisation also relies on a large number of other compounding ingredients as well as processing considerations.

8.2 EVOLUTION OF HIGH VALUE ADDED PRODUCTS The **** industry *** traditionally ******* a ******** approach ** developments *** changes ** a ****** critical *******. While *** underlying ****** considerations ****** a ***** foundation* the **** few ******* have **** substantial ********* in ******* developments *** product *********. In *** last *** years *** pace ** development ******** has ***********. One ** the ******* drivers *** this *** been *** requirement *** the ******* brands* and **** technically **** tire *************, to **** up *** value ***** in ***** to ****** market ***** and ****** margin. The ****** for **** has **** the **** influx ** low ****** Tier *** type ************ products *mainly **** China* and ********** developments ** other **** manufacturers ******* to **** themselves ** the ***** recognition ******.

RCCL’s ******** found **** types *** in ********** tire ******** based ** high ***** added ***** to ** a ****** driver *** precipitated ****** use **** in ***** of **** and ******** of ******.

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8.2.1 PC and SUV These *** tire ***** can ** treated ****** from * tread ***** viewpoint. The ***** trend *** these ***** is ** higher ****, lower ***** and *** speed *****. This *** has **** significant **** the ***** **** in the **** developed ****, especially ****** and ***** America. The ****** regions ****** to *** market ***** along ***** lines* the **** dramatic ***** are *** occurring ** the ***** economies* in ******* China *** India.

The three key drivers from a precipitated silica perspective are:

 **** ***** **** ********* o **** *** ***, *** ***** ** **, **** ** ***** ******* *** *** ** ** *** ***** ***** ***** ** ******* ******** ** **** **** *** ***** ****. o ** ******** ** **** ***** ** **** * ********** ***** **** ***** ***** ***** ***** ** ****** ***** ***** *****, ********* ****** ****** ** ** *** **** ***** ***** ** * ***** ** ****** ********, ***** ****** ****** *** ****** ***** *******.  ********* **** ******** o ** ***** ** ***** ************** ******** ***** ** *** * ***** ***** ** **** ******** ** *****, ************ ** ******* ******** ****** ******* *******. o ******** **** ********** ******** ************ *** *********** *******. o **** *** ***** *** ** *** *** **** ***** **** *** ****** *** ***** ** ******* *** ****.  *********** *****-***** o ************ **** ***** *** ******** **** ********* **** *** ***** ****** ** *** ****. *** *******, * ****** **** ***** ********* **** **** * *, * ** * ***** ******. ****** ************ **** *** ** *********** *****-***** in ***** ******* *** **** *****, ********* ** ** *** ******** ** *** *** * ****** **** **** ** * ** * ****** *** ********* **** ******. ***** *********** *****-***** lead ** ************* *** ******** ************ ****** ** **** ****** ********* *********** The **** to **** value ***** products ** summarised ** Figure *.*. It ** assumed **** the ***-weather *AW* tires ******* to *** ***** standard, **** the ***-season *AS* tires ** not. There *** many ******* dimensions ***** can *** to ******* tire **** and ******* value* these *** include ***-road ****** (****** for *****) as **** as **** technologies **** as ***** reduction* run **** systems ***. Figure 8.1 - PC and SUV Subtype Differentiation Overview

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8.2.2 Motorcycle and Scooter Within *** two ***** segment* radial ********** tires *** seen ** value*added ********. This ****** distinguishes ******* motorcycle *** scooter ***** as **** as ******* radial *** bias ************ for *** two *****.

RCCL ******* that ************ silica ** utilised **** in ********** radial ***** and ** a ****** extent ** lower ***** two ******* products.

8.2.3 Commercial Vehicle Tires Efforts ** the ********** truck **** sector **** been ******* on ******** solutions *** end *********. The ***** is ** total ****, encompassing *** complete **** lifecycle. The ***** segment *** seen ********* differentiation ** performance ***** with ********* performance. Developments ** wide **** tires* improved ******* resistance *** casing ********** (**********) feature among *** main ***************. Silica ******** have ********* been ********** low ** truck **** treads* however* material ************ as **** as ****** drivers *** pushing ********* loadings* particularly ** OE *****.

Other high value commercial tires include:

Agricultural *******: Increased ***** requirements *** a *** driver* there ** some *********** with ******.

Industrial *** OTR *******: Improved ********** and ***********.

Silica ********* have **** the ***** tires ** a ******* means ** differentiation. There ** significant *********** work ** progress ** increase ****** loadings ** the ***** (***** in particular*.

8.3 MARKET POSITIONING The market positioning of tires is an important factor when considering R&D effort and underlying material utilisation.

RCCL’s ******** for ************ silica **** and *** indicated * very ****** relationship **** tire ****** positioning.

This is explained in the following sections:

8.3.1 Manufacturer’s Tier Level Tire ************* can ** defined ** tiers* this ** typically **** via ***** positioning *e.g. premium ***** versus ******* brand*. For *** purposes ** this ******, tier ***** is ***** upon *** tire ************** ability ** supply ***** with ** tires ** well ** the ******* technology ***** of *** company. There ** some ********* between **** I *** tier ** companies. In ***** cases *** tier ** company ** allocated * specific ***** of ** and **** I ** volume* this ** done ********* to *** plant *** tire ******* (* tier I ******** may **** budget ***** which *** also ******** accordingly*. Please **** review ******* *.*.

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From * technological ********* the **** I ********* are *** most ********* and *** therefore ***** defined* examples ** tier ** and **** III ********* are *****, it ** not ********* to ******* details ** all ********* falling **** these **********.

Table 8.1 - Manufacturer's Tier Level

Tier Definition Companies I Provide significant quantities of OE tires to leading Bridgestone Kumho automotive brands in a wide range of tire types and Michelin Sumitomo sub types. Goodyear Toyo and/or Continental Yokohama Are recognised as technology leaders in their field of Pirelli Nokian expertise (e.g. high performance). Hankook

II ******* ******* ** ***** ** ******** *** ***** ****** *** **** ***** *********** ** *** *********** ****** ******. * III ***** ******* ** ***** *** ****** ****** *** ********* *********** ** *** *********** ******. ******** ***** **** *

8.3.2 OE Market A ******* driver *** precipitated ****** use ** tires ************ for *** Original ********* market. These ***** are ********* optimised *** performance ** meet *** exacting ********* of ********** manufacturers. Silica *** is ********* significantly ****** for ************* supplying **** the ** market *******.

The ** segment ** also * strong ****** for ********* complexity ** use ********. This ********* means **** specific ********* and ****** types *** used *** designated **** subtypes *** brands. This ***** of ********** is ********* highest ******* the ****** manufacturers.

8.3.3 RP Market The *********** tire ****** represents * more ******* segment **** a ************* viewpoint. Silica *** in **** segment *** significantly ****** for **** manufacturers ****** in *** OE *******. The ****** for **** is *** cascade ***** effect ***** technology *** be ****** down ******* ranges.

Silica *** was **** found ** be **** substantial *** tire ************* with * broad ***** of ******* offerings ***** allows ********** transfer ****** product ******.

8.4 GEOGRAPHICAL INFLUENCES Tire tread composition can vary from region to region, even within similar tire types and subtypes.

RCCL’s research found strong geographical influences relating to precipitated silica use.

The reasons for these differences are explained in the following sections:

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8.4.1 Performance Requirements Regional *********** in *********** requirements *** related ** a ****** of ******* including*

 *******/*********** conditions  ******* ******  ******* *****  **** ***** *** ********* Examples ** regional *********** include *** high ******** on *** grip ** Europe ***** contrasts **** comfort *** wear ******** in ***** America. These *** of ****** generalisations ***** also ****** upon **** tire *** types* however **** are ******** when ********* similar **** sub *****.

8.4.2 Compounding Differences From * tread *********** these ******* can ********* lead ** significant *********** in ********** tread ******** technology. An ******* of **** is *** premium ****** on **/SUV *** grip *********** in ****** relative ** some ***** regions. This *** led ** tread ********* in ****** with **** filler *** plasticiser ********.

A ******** to **** is *** PC*SUV ******* tire ***** in ***** America ***** have ************ had **** lower ****** loadings **** correspondingly ******* plasticiser *******.

8.5 EXTERNAL DRIVERS A ****** of ******** factors *** influence ************ silica *** and ***********.

RCCL’s research found strong external driver influence on current and potential precipitated silica use.

8.5.1 Tire Labelling The ******* status ** consumer **** labelling ** region ** presented ** Figure *.*. This ***** that ****** and ***** Asia *specifically ***** and ***** Korea* have ****** tire ********* schemes. The ******* upcoming ****** is *** implementation ***** in ***** and ******** legislation ** the ***. The *** implementation ** by ** means *** in ***** and *** already **** pushed **** several *****.

Figure 8.2 - Tire Labelling Status by Region

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 58 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

The ******** and ***** Asian ****** give ****** emphasis ** both ******* resistance *** wet ****, the ******* version **** have ******* emphasis ** these **********. These ********** provide *********** for ************ silica.

These ****** should ** considered ** parallel ** the ******* already ******* in ******** *.* to *.*.

8.5.2 Sustainable Developments From a raw material perspective there are three key points to company sustainability targets:

 ********* o **** ** ***** ** ***** **** ******** *** **** ***********. *********** ****** ******* ***** ** ********** *********** **** ************ **.g. *******).  ******* o **** ******** **** ******** ** ** ******** **** **** *** ****/******* production.  ***** o **** ** *** *********** *********, ***** ********** ********* *** ****. 1 Renewable natural resources are natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment.

The three factors above are incorporated into company targets. A review of five of the top 10 tire companies and targets is presented in Table 7.2.

Table 8.2 - Tire Company Sustainable Targets (Most Recent Publication)

Company Targets Notes Bridgestone Vision 2050: 100% Sustainable Materials Half-weight & long life technology Michelin **% *********** ******* ** ****: **% *********** ******* ** **** ***** **% ** ** * ********* ***, *% ***% ** ***** ******** ******** ****** ****** * ****** **** Goodyear ******* *** *********** ****** ********** ** **** **** ****** **** ********* ****** Continental ******** *********** *****: ********* ****** ****** ******* ****** Pirelli2 ***% renewable ** **** *******: ********* ** ***% renewable ** **** **% *********, *% ******** ***% fossil ***** ** **** ********* ** **** *****) ***% fossil ***** ** **** **% *********, *% ******** ****** ***% by **** **** ***% by **** 2 It is not clear if these targets are for all product lines. Cinturato is premium eco tire.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 59 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Review ** Table *.* reveals **** each ******* has ******* goal ***** based ** reduction ** material ***, sustainable ******* and *********. The ********** company ******* differ ******, from ******** target ******, to ************ levels ** undefined ******* with ******* developments. It ** clear* however* that *********** development ** gaining ******** and ** likely ** accelerate ** the *****-medium **** in ***** for ********* like *********** and ******** to ******* their *******/vision.

The ***** factors ******* impact ** future ************ silica *********. Tire ********* have ********* focused ** the ******* volume ********* to **** maximum ********. This ****** include ************ silica* however* the ******** sustainability ******* is *********** when *********** silica. This ** because **** **% ** a ****** energy *********** occurs ****** use. This ** dramatically ******* when ***** silica ** provide ***** rolling **********, which ********* provides ****** with *sustainable’ *********** which *** key ******* of **** top **** tire ************* sustainability *****.

Many ** the *** tier **** companies **** strategically ****** ‘**** products. These ******** primarily ******** to ******* the *********** via ******* energy *********** during ***. Several ** the *** tire ********* have ******** the ******* of *Eco’ ** incorporate ***** own ******* values* this ******** low ********* manufacturing* use ** non*oil ******* materials* use ** ingredients **** low *** levels **** numerous ***** options.

These *** products ********* a ***** but ************ significant ********** of *** level ************** product *********. This ** an ******* area *** naturally *******, sustainable ******** such **** husk ******* silica. A ********* of ************* and ****** fitting **** category *** displayed ** Table *.*. It ****** be ***** that **** tire ************* also ***** brand* therefore * particular ***** will **** a ***** of ************ which **** include *Eco’ *********** indicated ** a ******* manufacturer *****.

Table 8.3 - Top Tier Manufacturers' Eco Labelled Tire Examples (non-exhaustive)

Manufacturer Brand Description Bridgestone Ecopia ECOPIA provides eco-friendly performance through higher fuel efficiency and safety. It allows for reduced rolling resistance, which in turn enhances fuel efficiency. ECOPIA also reduces the production of harmful carbon dioxide emissions that contribute to global warming. Pirelli ******* ******** ** ***** ** ******** **** *********, *** *****, **** **** *** *** ************* ******. Sumitomo ****** ******* *** ******* **********. ******* ****** ******** **** ***** Enasave *** *******) Toyo ********** **** *********. ***** *** ******* *** ******* ********** ****. Yokohama ******** ************ ******** ****** ** ***** **** *** ******** ** ******* ***************, ***** *** ******** ******** ********* *** ******* *** ***** ********.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 60 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

8.6 COMPETING TECHNOLOGIES Primary ***** must ** on ***** compounds ***** are *** main *** area *** precipitated ******. Tire ***** compound *********** is ********* an ******** in **********. Development ******** the ********* of **** properties *** performance *******, some ** which **** opposite ************. The **** known ** these ** the ** called *magic ********* of ****, rolling ********** and *** grip. Legacy *********** for **/SUV ******** carbon ***** compounds ***** only *** of ***** three ********** could ** improved ** any *** time. The ****** of ****** reinforced ***** compounds *** to *** possibility ** optimising *** three ** these **********.

Currently ***** are ******** options ********* to *** tire ********** to **** the *********** balance ** properties. Consideration **** clearly ** given ** the ***** design* compound ****** and *********** technologies. A ****** of ***** options *** well ******* synergistically **** other *******, therefore *** permutations *** combinations ****** almost *******. Primary ******* include *** following *no ********** order**

 ***** ****** o ** ***** ******** . ******** ******* ********** ** * ********** o ******** ******* . ******** ********* . ****** ********** o ***** ************** . *****-**** (***********) . *********** *********) o ***** ************ . *****-***** . *****-****  ****** ********** o ******** o ****** o ******** ***** o ***** ********** ************)  ******* ********** o *** ** . ********* . ******** o ********** . ********** ** . ********* ***** ********** o **** **  ************ o ******** o ********* . **** *** ********  ********** *********

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 61 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

o ****** *** *******) o ****** *** *********) o ********* *** *********)  ********** ******* o ******** * ************) o ***** *** ********** *****) o **** ******* o ***** **** *******  *********** ******** ************** o ****-*********  ******* **** o *********** o ************ o ***********  ******* o **** ******* ****** o *** ******* ****** o ********** ******* ****** . ****** . ****** ***** . ****** Because ** the ********* of ******* available ** is *** easy ** determine ***** that *** directly ** competition **** precipitated ******. The ****-term ********* for ************ silica ****** to ** positive* this ** due ** its *********** relationship **** rolling **********. Requirements *** ever ******* rolling ********** will ** accelerated ** regional ************ (**** labelling) *** electric ******* development.

Even ** advent ** a ********** disrupter* such ** airless *****, the ***** compound* and ************ silica **** retain *** importance.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 62 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

9 INTERNATIONAL TRADE

This section deals with international trading of precipitated silica using high level data from national and regional import/export databases. This data is useful for general trend analysis for volumes and prices. It should be viewed with caution however, due to the wide range of products and end applications associated with each of the harmonized codes. The HS codes and assumptions as well as the INCO terms are provided as appropriate and should be taken into consideration

International trade analysis is done for the major regions and countries either producing precipitated silica for tires or consuming precipitated silica for tires. The choice of data (import versus export, or both) is based upon the regional production and consumption activity.

Notes: All ***** data ** for ***** precipitated ****** covering *** the ******* outlined ** Section *.*. **** **** is *** half **** (** June ****). Volumes *** in ********* of ****** tonnes *kMT* values *** in ***/MT. Imports ** exports **** global ********** trade **** all ***** regions*countries.

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9.1 REGIONAL TRADE BALANCES Regional ***** balances *** the *** regions ******* by **** are ********* in ****** *.*. These ******* are ******* by ************* of ******* and ******* outside ** the ****** (*.e. internal ******** trade ** not **********).

Figure 9.1 - Regional HS281122 Trade Balances for 2019

China ** the **** region **** a *** export *******. China’s **** balance *** *** *** compared ** the ******** year ** *** ***. North **** has *** highest *** imports* followed ** India *** Europe. Additional ********** details *** trends *** presented ** the ********* sections.

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9.2 AFRICA There *** no ******** producers ** precipitated ****** in ******. The ******** trade ******* for ****** is ********* in ****** *.*. Africa ** a *** importer **** net ******* increasing **** **** ** ****.

Figure 9.2 - Africa HS281122 Trade Balance 2015 to 2020

RCCL estimates from multiple trade databases and regions.

South ****** is *** most ********* country ****** this ****** with *** majority ** tire *************. Figure *.* presents ****** volumes **** South ****** from ******. **** ****** volume *** **.* kMT versus * **** ****** of **.* kMT. Average ***** peaked ** **** ** **** ***/MT* the **** average ***** was **** USD*MT.

Figure 9.3 - Africa: South Africa HS281122 Import from Global (FOB) 2015 to June 2020

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9.3 CHINA China ** the **** regional *** exporter. Historic ***** balance **** is ********* in ****** *.*. This ***** a ****** increase ** trade ******* from **** to ****, with **** having * substantial **** net ****** of *** kMT.

Figure 9.4 - China HS281122 Trade Balance 2015 to 2020

Figure *.* presents ****** imports **** China **** global. The **** import ****** was **.* kMT **** from **** volume ** **.* kMT. The ******* import ***** for **** was **** $/** down slightly **** the **** value ** **** **MT.

Figure 9.5 - China HS28112290 Import from Global (CIF) 2015 to 2020

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Figure 9.6 presents yearly exports from China to global. The 2019 export volume was 433 kMT up from 410 kMT in 2018. Average export value was 994 $/MT in 2019 compared to 1103 $/MT in 2018.

Figure 9.6 - China HS28112290 Export to Global (FOB) 2015 to 2020

Trends from comparison of 2019 values in Figures 9.5 & 9.6 are:

 ****** ****** *** ** *** **% ** *** ****** ******.  ****** ******* *** ***% ** *** ****** *******.

The ********** in ******* value *** MT ******** product *** and ************* cost *********** between *** regions.

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9.4 CIS There are no producers of tire precipitated silica within the CIS region. Figure 9.7 presents RCCL’s estimates for CIS trade balance. There was a steady increase in net imports from 2015 to 2018, the 2019 net import volume was 42 kMT.

Figure 9.7 - CIS HS281122 Historic Trade Balance 2015 to 2020

RCCL estimates from multiple trade databases and regions.

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9.5 EUROPE Europe’s ******** trade ******* is ********* in ****** *.*. This ***** that ****** is * net ******** with *** import ******* fluctuating ******* ** *** *** ***.

Figure 9.8 - Europe HS281122 Historic Trade Balance 2015 to 2020

Figure *.* presents ******* imports ** Europe **** global. There ** a ****** increase ** yearly ******* from **** to ****. The **** volume *** *** *** versus * **** ****** of *** kMT. The **** average ***** was **** $/** versus a **** average ***** of **** $/**.

Figure 9.9 - Europe HS281122 Import from Global (CIF) 2015 to 2020

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Figure *.** presents ******* exports **** Europe ** global. Volumes **** increased ** **** ** ***.* kMT with **** volumes ** ***.* kMT. The **** export ***** was **** $/** the previous **** was **** S*MT.

Figure 9.10 - Europe HS281122 Export to Global (FOB) 2015 to 2020

Trends from comparison of Figures 9.9 & 9.10 are:

 ****** ****** *** ** *** ************* ***% ** ****** ******.  ****** ******* *** ************* **% ** ****** *******. The value differential between import and export is a reflection of product mix and the cost structure within Europe.

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9.6 INDIA India’s trade balance is presented in Figure 9.11. India is a net importer, the differential has increased substantially over the past 3 years.

Figure 9.11 - India HS281122 Historic Trade Balance 2015 to 2020

Figure *.** presents ******* imports ** India **** global. The ****** indicates ********** import ******* from **** to ****. **** ****** was ***.* kMT ****** a **** volume ** ***.* kMT, ******* value *** *** **MT ** **** *** *** **MT ** ****.

Figure 9.12 - India HS281122 Import from Global (CIF) 2015 to 2020

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Figure *.** presents ******* exports **** India ** global. **** ****** was **.* kMT ****** a **** volume ** **.* kMT, ******* value *** *** **MT ** **** *** **** **MT ** ****.

Figure 9.13 - India HS281122 Export to Global (FOB) 2015 to 2020

Trends from comparison of Figures 9.12 & 9.13 are:

 ****** ****** *** ** *** ************* **% ** ****** ******.  ****** ******* *** ************* **% ** ****** *******.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 72 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

9.7 MIDDLE EAST Middle ****** trade ******* is ********* in ****** *.**. The ****** East ** a *** importer* net ******* have ******* from **** to ****, the **** net ****** was ** kMT.

Figure 9.14 - Middle East HS281122 Historic Trade Balance 2015 to 2020

RCCL estimates from multiple trade databases and regions.

Turkey ** the **** country ** the ****** East ********* precipitated ******. The ****** East ****** is * net ******** with **** net ******* estimated ** **.* kMT versus **.* kMT ** ****.

Imports ** Turkey *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.15 - Middle East: Turkey HS281122 Import from Global (CIF) 2015 to 2020

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Exports **** Turkey *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.16 - Middle East: Turkey HS281122 Export to Global (FOB) 2015 to 2020

Trends from comparison of Figures 9.15 & 9.16 are:

 ****** ****** *** ** *** ************* **% ** ****** ******.  ****** ******* *** ************* ***% ** ****** *******.

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9.8 USMCA USMCA’s ******** trade ******* is ********* in ****** *.**. This ****** is * net ********, with *** imports ********** from **** to ****. The **** net ****** was ** kMT.

Figure 9.17 - USMCA HS281122 Historic Trade Balances 2015 to 2020

RCCL estimates for Mexico from multiple trade databases and regions.

Imports ** USA *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.18 - USMCA: USA HS28112250 Import from Global (CV) 2015 to 2020

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 75 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Export **** USA *** presented ** Figure *.**. **** ****** was ***.* kMT ****** ***.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.19 - USMCA: USA HS28112250 Export to Global (FOB) 2015 to 2020

Trends from comparison of Figures 9.18 & 9.19 are:

 ****** ****** *** ** *** ************* **% ** ****** ******.  ****** ******* *** ************* ***% ** ****** *******.

While ****** is * small *** exporter* the ****** Eastern ****** is * net ********

Canada **** not **** production ** precipitated ****** for *****.

Imports ** Canada *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****. Over **% of *** imported ****** is **** the ***.

Figure 9.20 - USMCA: Canada HS281122 Imports from Global (FOB) 2015 to 2020

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9.9 NORTH ASIA North ****** historic ***** balance ** presented ** Figure *.**. This ****** has * high *** import ****** which *** *** *** in ****.

Figure 9.21 - North Asia HS281122 Historic Trade Balance 2018 to 2020

RCCL estimates for Vietnam from multiple trade databases and regions. 2015 to 2017 values pending.

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Import ** Japan *** presented ** Figure *.**. **** ****** was ***.* kMT ****** ***.* kMT in ****, average ***** was *** $/** in **** *** **** **MT ** ****.

Figure 9.22 - North Asia: Japan HS281122 Import from Global (CIF) 2015 to 2020

Export **** Japan *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.23 - North Asia: Japan HS281122 Export to Global (FOB) 2015 to 2020

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Import ** South ***** are ********* in ****** *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.24 - North Asia: South Korea HS281122 Export to Global (CIF) 2015 to 2020

Export **** South ***** are ********* in ****** *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.25 - North Asia: South Korea HS281122 Import from Global (CIF) 2015 to 2020

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Imports ** Taiwan *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.26 - North Asia: Taiwan HS281122 Import from Global (CIF) 2015 to 2020

Exports **** Taiwan *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.27 - North Asia: Taiwan HS281122 Export to Global (FOB) 2015 to 2020

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Imports ** Thailand *** the *** different ***-codes *** presented ** Figure *.** & *.**. **** ******* were **.* & **.* kMT ****** **.* & **.* kMT in ****, average ****** were **** & **** $/** in **** *** **** * **** **MT ** ****.

Figure 9.28 - North Asia: Thailand HS28112210 Imports (CIF) 2015 to 2020

Figure 9.29 - North Asia: Thailand HS28112290 Imports (CIF) 2015 to 2020

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Exports **** Thailand *** presented ** Figure *.**. **** ****** was **.* & **.* kMT ****** **.* & *.* kMT in ****, average ***** was *** & *** $/** in **** *** *** * n*a **MT ** ****.

Figure 9.30 - North Asia: Thailand HS28112210 Export to Global (FOB) 2015 to 2020

Figure 9.31 - North Asia: Thailand HS28112290 Export to Global (FOB) 2015 to 2020

Note: Thailand changed HS designation for silica post 2018, reflected in the shift of volumes between codes in the figures above.

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9.10 LATAM LATAM’s ******** trade ******* is ********* in ****** *.**. This ****** is * net ******** with **** net ******* of ** kMT.

Figure 9.32 - LATAM's HS281122 Historic Trade Balance 2015 to 2020

RCCL estimates from multiple regional databases. LATAM’s exports outside the region were low and have not been considered.

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9.11 SOUTH ASIA South ****** historic ***** balance ** presented ** Figure *.**. This ****** is * net ******** with **** net ******* of ** kMT. Net ******* have ********* gradually **** ****.

Figure 9.33 - South Asia's HS281122 Historic Trade Balance 2015 to 2020

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Imports ** Indonesia *** presented ** Figure *.**. **** ****** was **.* kMT ****** **.* kMT in ****, average ***** was **** $/** in **** *** **** **MT ** ****.

Figure 9.34 - South Asia: Indonesia HS281122 Imports (CIF) 2015 to 2020

Exports **** Indonesia *** presented ** Figure *.**. **** ****** was **.* kMT ****** *.* kMT in ****, average ******* was **** $/** in **** *** **** **MT ** ****.

Figure 9.35 - South Asia: Indonesia HS281122 Exports (FOB) 2015 to 2020

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9.12 AVERAGE TRADE VALUES PER MT Figure *.** presents ******* trade ****** for ******* to ******** regions*countries. This ***** significantly ****** values *** import ** China *** USA* indicating ************* different ****** product ***** for ***** and ***.

Figure 9.36 - Average Import Values for Selected Regions/Countries 2015 to 2020

Note: HS codes vary from 6 to 11 digits.

Figure *.** presents ******* trade ****** for ******* from ******** regions*countries. This ***** high ****** values *** USA* Europe *** South ***** indicating **** value ******* mixes. Values *** India *** China *** significantly *****, indicating * commodity **** product ***.

Figure 9.37 - Average Export Values for Selected Regions/Countries 2015 to 2020

Note: HS codes vary from 6 to 11 digits.

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10 MARKET DEMAND

This section provides detailed precipitated silica market volumes and forecasts. The volumes are derived using RCCL’s projection III method outlined in Section 4. This method provides actual market volumes up to 2019 followed by projected volumes to 2040. The projected volumes adjust the 2019 volume by YoY changes in tire manufacturing plant product splits and compounding technology, coupled with market models for related tire groups. These market models use changes in automotive manufacturing and regional car parcs to adjust forward values.

Section 9.1 provides global volumes split by precipitated silica type and subtypes. Section 9.2 provides regional volumes split in the same way. Section 9.3 provides country volumes for split by main type only.

Note: The RCCL total tire market includes all tire related products. Please view the tire segment data in Appendix I to view the scope of the full tire market.

All volumes in this section are provided in thousands of metric tonnes (kMT).

10.1 GLOBAL DEMAND Global ****** for *** silica ***** is ********* in ***** **.*. **** ****** was ********* at **** kMT **** a *** growth ** *.*%. The **/** decline ** estimated ** **.*% followed by * *.*% 20/** CAGR reducing ** subsequent *******.

Table 10.1 - Global Demand All Silica Types 2015 to 2040

Year ∆, % CAGR, % Type 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 All **** **** **** **** **** **** **** *.* ***.5 *.* *.* *.* *.*

Global demand for STS and HDS types is presented in Table 10.2.

**** ****** for *** was ********* at **** kMT **** a *** growth ** *.*%. The **/** decline ** estimated ** **.*% followed by * *.*% 20/** CAGR reducing ** subsequent *******.

**** ****** for *** was ********* at *** kMT **** a *** growth ** *.*%. The **/** decline ** estimated ** **.*% followed by * *.*% 20/** CAGR reducing ** subsequent *******.

Growth *** HDS ** seen ** be ************* higher **** STS.

Table 10.2 - Global Demand for STS and HDS 2015 to 2040

Year ∆, % CAGR, % Type 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 HDS **** **** **** **** **** **** **** *.* ***.6 *.* *.* *.* *.* STS *** *** *** *** *** *** *** *.* ***.3 *.* *.* *.* *.*

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Global demand for HDS types is presented in Table 10.3.

MSA ***** have ************* higher *******. The **** volume *** MSA *** estimated ** **** *** with * YoY ****** of *.*%. The **/** decline ** estimated ** **% ******** by * *.*% 20/** CAGR reducing ** subsequent *******.

The **** volume *** LSA *** estimated ** *** *** with * YoY ****** of *.*%. The **/** decline ** estimated ** **% ******** by * *.* % **/** CAGR reducing ** subsequent *******.

The **** volume *** HAS *** estimated ** *** *** with * YoY ****** of *.*%. The **/** decline ** estimated ** **.*% followed by * *.*% 20/** CAGR reducing ** subsequent *******.

Table 10.3 - Global Demand for HDS Types 2015 to 2040

Year ∆, % CAGR, % HDS 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 MSA *** **** **** *** **** **** **** *.* *** *.* *.* *.* *.* LSA *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* HSA ** *** *** *** *** *** *** *.* ***.4 *.* *.* *.* *.*

Global ****** for *** is ********* in ***** **.*. The ****** volume *** CTS ** contained ****** the ****** values ** the ********* tables. The ****** has **** estimated ************* using *********** RCCL ********* based ** confidential *******. These ****** have * high ***** of ***********, especially *** forecast ****** post ****.

Table 10.4 - Global Demand for CTS Types 2015 to 2040

Year ∆, % CAGR, % Type 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 CTS *.* *.* *.* *.* *.* ** ** **.* ***.0 **.* **.* **.* *.* Note* Volumes **** extrapolated **** a ******* number ** tire *********. It ** assumed ****, with *** exception *** CTS ** used *** specialised *** volume **** at ******* tire *********.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 88 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

10.2 REGIONAL DEMAND This section details regional volumes by type and subtype.

Regional *******, ordered ** **** ******, for *** silica ***** are ********* in ***** **.*. North **** has *** highest **** volume* followed ** China *** then ******.

The *** * ******* for ****/** growth ***** (%) ***:

China ***.8* > ***** (*.1) * S. Asia **.6*

The *** * ******* by **** volume *kMT* are*

China ****) > *. Asia ****) > ****** (***)

The *** * ******* by ****/** volume ****** (***) are:

China ****) >> *. Asia ***) >> ***** (**)

The *** * ******* by ****/** volume ****** (***) are:

China ****) >> *. Asia ****) >> ***** (**)

Table 10.5 - Regional Demand All Silica Types 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 N. Asia *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* China *** *** *** *** *** *** **** *.* *** *.* **.* *.* *.* Europe *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* USMCA *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* LATAM ** ** ** ** ** ** *** *.* *** *.* *.* *.* *.* CIS ** ** ** ** ** ** ** **.* *** *.* *.* *.* *.* India ** ** ** ** ** ** *** **.8 *** *.* *.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* ** *.* *.* *.* *.* M. East ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Africa * ** ** ** ** ** ** *.* ***.1 *.* *.* *.* *.*

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Regional *******, ordered ** **** ******, for *** types *** presented ** Table **.*. North **** has *** highest **** volume* followed ** Europe *** then *****.

The *** * ******* for ****/** growth ***** (%) ***:

China ***.1* > ***** (**.9) * Africa ***.5*

The *** * ******* by **** volume *kMT* are*

China ****) > *. Asia ****) > ****** (***)

The *** * ******* by ****/** volume ****** (***) are:

China ****) >> *. Asia ***) >> ***** (**)

The *** * ******* by ****/** volume ****** (***) are:

China ****) >> *. Asia ***) >> ***** = ***** (**)

Table 10.6 - Regional Demand for HDS 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 N. Asia *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* Europe *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* China *** *** *** *** *** *** *** *.* *** **.* **.* *.* *.* USMCA *** *** *** *** *** *** *** *.* ** *.* *.* *.* *.* LATAM ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* CIS ** ** ** ** ** ** ** **.* *** *.* *.* *.* *.* M. East ** ** ** ** ** ** ** *.* *** **.* *.* *.* *.* India ** ** ** ** ** ** ** **.4 *** *.* **.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Africa * * * * * * ** *.* ***.4 **.* **.* *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 90 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Regional *******, ordered ** **** ******, for *** types *** presented ** Table **.*. China *** the ******* **** ******, followed ** North **** and *****.

The *** * ******* for ****/** growth ***** (%) ***:

China ***.1* > ***** (**.9) * Africa ***.5*

The *** * ******* by **** volume *kMT* are*

China ****) > *. Asia ****) > ****** (***)

The *** * ******* by ****/** volume ****** (***) are:

China ***) >> *. Asia **) > *. Asia **)

The *** * ******* by ****/** volume ****** (***) are:

China ***) >> *. Asia ***) >> ***** = *. Asia **)

Table 10.7 - Regional Demand for STS 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 China *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* N. Asia ** ** ** ** ** ** *** *.* *** *.* *.* *.* *.* USMCA ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Europe ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* India ** ** ** ** ** ** ** **.7 *** *.* *.* *.* *.* LATAM ** ** ** ** ** ** ** *.* *** **.4 *.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* ** *.* *.* *.* *.* CIS ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* M. East * * * * * ** ** *.* *** *.* *.* *.* *.* Africa * * * * * * * *.* ***.4 *.* **.6 *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 91 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Regional ****** for *** LSA ***** is ********* in ***** **.*. Europe *** the ******* **** ******, followed ** North **** and **** China. China *** the ******* growth ********* for *** types* primarily *** to ****** tire ************.

Table 10.8 - Regional Demand for HDS LSA 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Europe ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* N. Asia ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* China ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* CIS ** ** ** ** ** ** ** **.* *** *.* *.* *.* *.* USMCA * * * * * * * *.* ** *.* **.3 *.* *.* LATAM * * * * * * * *.* *** *.* *.* *.* *.* M. East * * * * * * * *.* *** *.* *.* *.* *.* S. Asia *.* *.* *.* *.* *.* *.* *.* *.* ***.2 *.* *.* *.* *.*

Regional ****** for *** MSA ***** is ********* in ***** **.*. North **** has *** highest **** volume* followed ** China *** then ******.

Table 10.9 - Regional Demand for HDS MSA 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 N. Asia *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* China *** *** *** *** *** *** *** *.* *** **.* **.* *.* *.* Europe *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* USMCA *** *** *** *** *** *** *** *.* ** *.* *.* *.* *.* LATAM ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* CIS ** ** ** ** ** ** ** **.* *** *.* *.* *.* *.* India ** ** ** ** ** ** ** **.1 *** *.* **.* *.* *.* S. Asia ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* M. East ** ** ** ** ** ** ** *.* *** **.* *.* *.* *.* Africa * * * * * * ** *.* ***.3 **.* **.* *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 92 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Regional ****** for *** HAS ***** is ********* in ***** **.**. North **** has *** highest **** volume* followed ** Europe *** then *****. China *** the ******* growth ********* followed ** North **** and **** Europe.

Table 10.10 - Regional Demand for HDS HSA 2015 to 2040

Year ∆, % CAGR, % Region 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 N. Asia ** ** ** ** ** ** *** *.* *** *.* *.* *.* *.* Europe ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* China * ** ** ** ** ** ** *.* ** **.* **.* *.* *.* USMCA * * * * * * * *.* **.5 *.* *.* *.* *.* M. East * * * * * * * *.* *** *.* **.* *.* *.* India * * * * * * * **.1 *** *.* **.* *.* *.* CIS * * * * * * * ** *** **.* **.* *.* *.* S. Asia * * * * * * * *.* ** *.* *.* *.* *.* LATAM *.* * * *.* * * * *.* *** **.* **.* *.* *.* Africa *.* *.* *.* *.* *.* *.* *.* *.* *** **.* **.* *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 93 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

10.3 COUNTRY DEMAND This section presents country demand for all silica types.

Table **.** presents ******* country ******. South ****** is *** most *********** country.

Table 10.11 - African Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 S. Africa * * ** * ** ** ** *.* *** *.* *.* *.* *.* Egypt *.* *.* *.* *.* *.* *.* *.* *.* *** **.* *.* *.* *.* Kenya *.* * * * * * * * * * * * *

Table 10.12 presents CIS country demand. Russia is the most significant country.

Table 10.12 - CIS Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Russia ** ** ** ** ** ** ** ** *** *.* *.* *.* *.* Serbia * * * * * ** ** *.* *** *.* *.* *.* *.* Belarus * * * * * * * *.* *** **.2 *.* *.* *.* Ukraine * * * * * * * *.* *** **.1 *.* *.* *.* Kazakh. * *.* *.* *.* *.* *.* *.* **.* *** *.* *.* *.* *.* Azerb. *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 94 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table **.** presents ******** country ******. Germany *** the ******* **** ******, followed ** France* Romania *** Hungary.

Table 10.13 - European Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Germany ** ** ** ** ** ** ** **.1 *** **.0 **.8 *.* *.* France ** ** ** ** ** ** ** **.0 *** *.* *.* *.* *.* Romania ** ** ** ** ** ** ** **.3 *** *.* *.* *.* *.* Hungary ** ** ** ** ** ** ** *.* *** **.* *.* *.* *.* Poland ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Spain ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Italy ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Portugal ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* UK ** ** ** ** * ** ** **.2 *** *.* **.5 *.* *.* Slovakia ** ** ** ** ** ** ** **.1 *** **.2 *.* *.* *.* Czech R. ** ** ** ** ** ** ** ** *** **.* *.* *.* *.* Slovenia * * * * ** ** ** ** ** **.* *.* *.* *.* Nether. * * * * * * * **.4 *** *.* *.* *.* *.* Luxem. * * * * * * * ** *** *.* *.* *.* *.* Finland * * * * * * * *.* *** **.2 *.* *.* *.* Bulgaria * * * * * * * *.* *** *.* *.* *.* *.* Austria * * * * * * * ** *** **.* **.* *.* *.* Belgium * * * * * * * ** *** **.* **.* *.* *.*

Table 10.14 presents Middle East country volumes. Turkey is the most significant in the Middle East.

Table 10.14 - Middle East Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Turkey ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Iran *.* *.* *.* *.* *.* *.* *.* *.* ** **.* *.* *.* *.* Saudi Arabia *.* *.* *.* *.* *.* *.* *.* **.4 ** **.* *.* *.* *.* Israel *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.* Pakistan *.* *.* *.* *.* *.* *.* *.* **.8 *** *.* *.* *.* *.* UAE *.* *.* *.* *.* *.* *.* *.* ** *** **.* *.* *.* *.* Qatar * *.* *.* *.* *.* *.* *.* ** ** *.* **.* **.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 95 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table 10.15 presents USMCA country volumes. The USA is the most significant.

Table 10.15 - USMCA Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 USA *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* Mexico ** ** ** ** ** ** ** ** **.4 **.* *.* *.* *.* Canada ** ** ** ** ** ** ** **.1 *** **.1 *.* *.* *.*

Table 10.16 presents North Asian country demand. Japan has the highest 2019 demand, followed by Thailand and South Korea.

Table 10.16 - North Asia Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Japan *** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* Thailand ** *** *** *** *** *** *** *.* *** *.* *.* *.* *.* S. Korea *** *** *** ** *** *** *** *.* *** *.* *.* *.* *.* Vietnam ** ** ** ** ** ** ** *.* *** **.* *.* *.* *.* Taiwan ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Bangl. *.* *.* *.* *.* *.* *.* *.* ** *** **.* *.* *.* *.*

Table 10.17 presents South American country demand. Brazil is the most significant.

Table 10.17 - South America Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Brazil ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Argent. * * ** * ** ** ** *.* *** *.* *.* *.* *.* Chile *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.* Costa Rica *.* *.* *.* *.* *.* *.* *.* *.* *** **.* *.* *.* *.* Equador *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.* Peru *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.* Venez. *.* *.* *.* *.* *.* *.* *.* *** *** ***.9 *.* *.* *.* Columbia *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.*

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Table 10.18 presents South Asian country volumes. Indonesia is the most significant.

Table 10.18 - South Asia Country Volumes All Types 2015 to 2040

Year ∆, % CAGR, % Country 2015 2018 2019 2020 2025 2030 2040 18/19 19/20 15/19 20/25 25/30 30/40 Indonesia ** ** ** ** ** ** ** *.* *** *.* *.* *.* *.* Malaysia *.* *.* *.* *.* ** ** ** ** **.0 *.* *.* *.* *.* Sri Lanka *.* *.* *.* *.* *.* *.* ** *.* **.1 *.* *.* *.* *.* Philipp. *.* *.* *.* *.* *.* *.* *.* *.* *** *.* *.* *.* *.*

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 97 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

11 MARKET PRICING

This section provides historic average delivered prices for three reference grades:

 STS 125 o A standard precipitated silica with a nominal 125 m2/g specific surface area.  HDS 160 o A highly dispersible precipitated silica with a nominal 160 m2/g specific surface area.  HDS 200 o A highly dispersible precipitated silica with a nominal 200 m2/g specific surface area.

The delivered prices are average values from a range of products from different manufacturers destined for various tire manufacturing plants within the region. There is a spread of values around the average, the spread is influenced by factors including:

 ******* ************  ***********  ******* ***  ********** ********** ****** *** ************ ******  ******* ******** **.g. ************** ***********)

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 98 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

11.1 CHINA Average delivered reference grade pricing for China is provided in Figure 11.1.

Figure 11.1 - China: Average Delivered Price for Reference Grades 2015 to 2019

Pricing based on confidential sources covering multiple destinations and manufacturers using RCCL estimates and averaging and publically available historic currency translations.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 99 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

11.2 EUROPE Average delivered reference grade pricing for Europe is provided in Figure 11.2.

Figure 11.2 - Europe: Average Delivered Price for Reference Grades 2015 to 2019

Pricing based on confidential sources covering multiple destinations and manufacturers using RCCL estimates and averaging and publically available historic currency translations.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 100 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

11.3 USMCA Average delivered reference grade pricing for USMCA is provided in Figure 11.3.

Figure 11.3 - USMCA: Average Delivered Price for Reference Grades 2015 to 2019

Pricing based on confidential sources covering multiple destinations and manufacturers using RCCL estimates and averaging and publically available historic currency translations.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 101 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

12 MARKET VALUES

This section details estimated market values using the methodology outlined in Section 4.4. All values are provided in millions of USD (MM$) unless otherwise stated.

12.1 GLOBAL MARKET VALUE Global ****** value *** all ***** is ********* in ***** **.*. **** ****** value *** estimated ** **** **$, this ** projected ** rise *using **** pricing* to **** MM*.

Table 12.1 - Global Market Value All Types 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 Global **** **** **** **** **.*% *.*% *.*%

Global market value by type is presented in Table 12.2.

For *** types *** **** ***** was ********* at **** MM** this ** projected ** rise *using **** pricing* to **** MM*.

For *** types *** **** ***** was ********* at *** MM** this ** projected ** rise *using **** pricing* to *** MM*.

Table 12.2 - Global Market Value by Type 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 HDS **** **** **** **** **.4% *.*% *.*% STS *** *** *** *** **.0% *.*% *.*%

Global ****** value ** HDS ******* is ********* in ***** **.*. MSA **** are **** to **** the ******* market *****. HSA ***** have *** highest ****** potential.

Table 12.3 - Global Market Value by HDS Subtype 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 HDS LSA ***.* ***.* ***.* ***.* **.2% *.*% *.*% HDS MSA **** **** **** **** **.1% *.*% *.*% HDS HSA *** *** *** *** *.*% **.*% *.*%

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 102 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

12.2 REGIONAL MARKET VALUE Regional ****** values *** all ***** are ********* in ***** **.*. Europe *** the ******* **** ****** value* followed ** North **** and *****. By **** China ** expected ** have *** highest ****** value* followed ** Europe *** North ****.

Table 12.4 - Regional Market Value All Types 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 Africa ** ** ** ** *.*% *.*% *.*% China *** *** *** *** **.8% *.*% *.*% CIS ** ** ** ** *.*% *.*% *.*% Europe *** *** *** *** **.6% *.*% *.*% India ** ** ** *** ***.1% *.*% *.*% Middle East ** ** ** ** *.*% *.*% *.*% USMCA *** *** *** *** *.*% *.*% *.*% North Asia *** *** *** *** **.4% *.*% *.*% LATAM ** ** *** *** *.*% *.*% *.*% South Asia ** ** ** ** **.1% *.*% *.*%

Regional ****** values *** STS ***** are ********* in ***** **.*. China *** the ******* **** ****** value* followed ** USMCA *** then ******. China ******* the ******* value ******* **** ******** by ***** and ***** Asia.

Table 12.5 - Regional Market Value STS 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 Africa * * * * **.0% **.3% *.*% China *** *** *** *** **.7% *.*% *.*% CIS ** ** ** ** *.*% *.*% *.*% Europe ** ** ** ** **.7% **.5% *.*% India ** ** ** ** ***.1% *.*% *.*% Middle East * * ** ** **.3% *.*% *.*% USMCA ** ** ** ** *.*% **.3% *.*% North Asia ** ** ** ** **.9% *.*% *.*% LATAM ** ** ** ** *.*% *.*% *.*% South Asia ** ** ** ** **.0% *.*% *.*%

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 103 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Regional ****** values *** HDS ***** are ********* in ***** **.*. Europe *** the ******* **** ******** value ******** by ***** Asia *** China. By **** China *** the ******* value ******** by ****** and ***** Asia.

Table 12.6 - Regional Market Value HDS 2018/19/30/40

MM$ Year Growth CAGR 2018 2019 2030 2040 18 to 19 19/30 30/40 Africa *.* *.* **.* **.* *.*% *.*% *.*% China *** *** *** *** **.1% *.*% *.*% CIS ** ** ** ** **.*% *.*% *.*% Europe *** *** *** *** **.4% *.*% *.*% India ** ** ** ** **.7% *.*% *.*% Middle East ** ** ** ** *.*% *.*% *.*% USMCA *** *** *** *** *.*% *.*% *.*% North Asia *** *** *** *** **.9% *.*% *.*% LATAM ** ** ** ** *.*% *.*% *.*% South Asia ** ** ** ** **.9% *.*% *.*%

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 104 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

13 ESTIMATED RUBBER CAPACITY UTILISATIONS

This section looks at tire market demand versus installed capacity. Total installed capacity (for all market segments) is provided along with RCCL’s estimates of capacity serving the rubber industry.

13.1 GLOBAL UTILISATION Table **.* presents ****** tire ****** versus ************* capacities. The **** segment ******** **% ** total ******** in ****, this ********* to **% of ******** by **** and ** set ** increase ** **% ** total ******** by **** with ********* stated **********.

RCCL’s ********* of ******** serving *** rubber ******** (**** and rubber *****) indicates **** tire ******* account *** **% ****** capacity ** **** ****** slightly ** **% ** ****. Forward *********** indicate ************ increase ** **% ** **** *** ***% ** ****.

Table 13.1 - Global Demand vs Capacity 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** **** **** **** **** **** **** **** ****** *** **** **** **** **** **** **** **** Tire Market Demand **** **** **** **** **** **** **** Utilisation ***** ** ** ** ** ** ** ** % ****** ** ** ** ** ** ** ***

13.2 REGIONAL UTILISATIONS The ***** import ***** export ******* (**) for HS****** and ****** estimate *** tire ******* IE ** also ******** for *** individual *******. Projected ** values *** RCCL ********* based ** ****/** changes.

Table **.* presents ****** vs ******** for ******. There ** no ******** capacity ******* the ****** industry ** Africa. Tire ****** is ****** by *******.

Table 13.2 – Demand vs Capacity for Africa 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** * * * * * * * ****** * * * * * * * Tire Market Demand *** * ** ** ** ** ** ** IE ***** ** ** ** ** ** ** ** **** * ** ** ** ** ** ** Utilisation ****** % * * * * * * * Current **** import ******* are ********* to ********* approximately **% of *** import ****** for ******.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 105 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table **.* presents ****** vs ******** for *****. Capacity ****** show **** China *** substantial ****** capacity **** with * significant *** export ******. Rubber ******** utilisation ***** on **** volumes **** increases **** **% ** **** ** **% ** ****. Forward *********** indicated *********** increasing ** **% ** **** *** ***% ** ****.

Table 13.3 – Demand vs Capacity for China 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** **** **** **** **** **** **** **** ****** **** **** **** **** **** **** **** Tire Market Demand *** *** *** *** *** *** *** **** IE ***** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** Utilisation ****** % ** ** ** ** ** ** *** IE **** balance ** based ** **% **** related ****** volumes *** **% **** related ****** volumes. Table **.* presents ****** vs ******** for ***. There ** no ******** capacity ******* the ****** industry ** CIS. Tire ****** is **** to ** substantially ****** than *** estimated ** Tire ******, this ** most ****** related ** imports ** compound **** the ** or ***** regions.

Table 13.4 – Demand vs Capacity for CIS 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** * * * * * * * ****** * * * * * * * Tire Market Demand *** ** ** ** ** ** ** ** IE ***** ** ** ** ** ** ** ** **** ** ** ** ** ** ** ** Utilisation ****** % * * * * * * * IE Tire balance is based on 70% tire related import volumes. Table **.* presents ****** vs ******** for ******. Rubber ******** utilisation ** Europe ** estimated ** **% ** **** ******** to **% by ****. Forward *********** indicate ******* utilisation ******* **** ******** by **** recovery ** ****.

Table 13.5 – Demand vs Capacity for Europe 2015 to 2040 kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** *** *** *** *** *** *** *** ****** *** *** *** *** *** *** *** Tire Market Demand *** *** *** *** *** *** *** *** IE ***** ** ** ** ** ** ** ** **** ** ** ** ** ** ** ** Utilisation ****** % ** ** ** ** ** ** ** IE **** balance ** based ** **% **** related ****** volumes *** **% ******* tire ****** volumes.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 106 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table **.* presents ****** vs ******** for *****. Utilisation ***** for **** capacity ** India *** estimated ** be ***. India ** transitioning **** low ***** production ** higher *****, therefore **** situation *** change ** the *****-medium **** as ******* change ** increased *** content *** tire ****** increases.

Table 13.6 – Demand vs Capacity for India 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** *** *** *** *** *** *** *** ****** ** ** *** *** *** *** *** Tire Market Demand *** ** ** ** ** ** ** *** IE ***** ** *** *** *** *** *** *** **** ** ** ** ** ** ** ** Utilisation ****** % ** ** * * ** ** ** IE **** balance ** based ** **% **** related ****** volumes *** **% **** related ****** volumes. The **** of ****** for **** market ****** may ** understated* this ** due ** COVID*** uncertainties* recovery **** and ********** transitions.

Table **.* presents ****** vs ******** for ****** East. Turkey ** the **** influence ** this ****** with ********* HVA **** production *** added **** related ************ silica ********. Utilisation ** estimated ** increase **** **% ** **** ** **% ** ****. Following ******** expansion **** ****, ************ will **** up ** **% ** ****.

Table 13.7 – Demand vs Capacity for Middle East 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** ** ** ** ** *** *** *** ****** ** ** ** ** ** ** ** Tire Market Demand *** ** ** ** ** ** ** ** IE ***** ** ** ** ** ** ** ** **** * ** ** ** *** *** *** Utilisation ****** % ** ** ** ** ** ** ** IE **** balance ** based ** **% **** related ****** volumes *** **% **** related ****** volumes. The **** of ****** for **** market *** be *********** due ** regional ********* impacting *** dynamics ** Turkey ***** is *** main ****** in **** region.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 107 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table **.* presents ****** vs ******** for *****. Rubber ************ are ********* to ** high **** a **** utilisation ** **%, **** is ******* to **** to **% by **** followed ** recovery ** ****.

Table 13.8 – Demand vs Capacity for USMCA 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** *** *** *** *** *** *** *** ****** *** *** *** *** *** *** *** Tire Market Demand *** *** *** *** *** *** *** *** IE ***** * ** ** ** ** ** ** **** ** ** ** ** ** ** ** Utilisation ****** % ** ** ** ** ** ** *** IE **** balance ** based **: **% **** related ****** volumes ** **** ******** to **% by ****; **% **** related ****** volumes ********** to **% by ****. Table **.* presents ****** vs ******** for ***** Asia. North ***** capacity *********** is **** with * **** *********** rate ** **%.

Table 13.9 – Demand vs Capacity for North Asia 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity Total 368 400 402 402 512 512 512 Rubber 214 249 250 250 310 310 310 Tire Market Demand kMT 421 479 496 392 532 614 741 IE Total 79 180 211 216 230 240 250 Tire 153 261 267 244 274 304 334 Utilisation Rubber % 125 87 92 59 83 100 131 IE Tire balance is based on 90% tire related import volumes and 10% tire related export volumes. Table **.** presents ****** vs ******** for *****. Capacity *********** (********* at **% ** ****) ** high *** LATAM *** is ******** to **** to ***% by ****.

Table 13.10 – Demand vs Capacity for LATAM 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** ** ** ** ** ** ** ** ****** ** ** ** ** ** ** ** Tire Market Demand *** ** ** ** ** ** ** *** IE ***** ** ** ** ** ** ** ** **** ** ** ** ** ** ** ** Utilisation ****** % ** ** ** ** *** *** *** IE **** balance ** based ** **% **** tire ******* import *******. Export ******* are ****** to ** zero.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 108 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

Table **.** presents ****** vs ******** for ***** Asia. Data ********* that **** related ******** is ********* in **** region. The ***** figures **** are ********* so ****** be ******* with *******.

Table 13.11 - Demand vs Capacity for South Asia 2015 to 2040

kMT Year 2015 2018 2019 2020 2025 2030 2040 Capacity ***** ** ** ** ** ** ** ** ****** ** ** ** ** ** ** ** Tire Market Demand *** ** ** ** ** ** ** ** IE ***** ** ** ** ** ** ** ** **** ** ** ** ** ** ** ** Utilisation ****** % *** *** *** ** ** *** *** IE **** balance ** based ** **% **** related ****** volumes.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 109 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

14 CONCLUDING COMMENTS

Tire ************ silica ****** volumes **** at * CAGR ** *.*% for the ****/** period* this ****** than ******* tire ******** growth ** set ** continue ** the ***** term **** a **** of *.*% for ****/** followed ** *.*% for ****/**. The ****** growth ** being ****** by *** types ***** had * ****/** CAGR of *.*% dropping ** *.*% for ****/** and then *.*% for ****/**. These ********* growth ***** for *** take * cautious **** with ******* to ******** of **** labelling *** regional ************.

The ****** market ***** for **** was ********* at **** MM* versus * **** ***** of **** MM*. These ******* are ***** on * *.*% market volume ******** between ****/**, which ********* indicates *********** pricing ********. HDS ******* increased ** *.*% between ****/** with a ****** reduction ** value* this ********* higher ******* pressure ** the *** types. Precipitated ****** manufacturers *** trying ** overcome ***** pricing ********* with ************ of ************** products *** there ** an ********** this **** have * positive ****** on ****** value ** the ***** term.

The ************ silica ************* landscape ******** to ******** acquisition ** Huber ****** during ****. Huber **** minor ******* with ******* to **** silica* the **** by ****** allows *** expansion **** new ******* and ************* of ******** coverage. Evonik *** expected ** rationalise ******** and ****** in **** with ****** segments.

For **** report **** have ********** modelling ** manufacturing ***** and ****** pricing *** precipitated ******. This ***** will ** extended *** improved *** future ******** of **** report. Client ******** for ******* is ****** welcome.

For a detailed industry analysis please view Section 2 – Executive Summary.

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 110 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

15 APPENDICES

15.1 TIRE TYPES AND SUBTYPES The following type and subtype definitions are used in this report. Volumes from subtypes are allocated to their parent type.

Table 15.1 – Tire Types and Subtypes

Tire Type Subtype Tire Type Subtype All Adhesives PC PC – AS Aero Aero – Radial (Passenger Car) PC – AW (Aircraft) Aero – Retread PC – Eco Aero – Xply Agri Agri – Radial PC – HP AS (Agricultural) Agri – Xply Large PC – HP SM Agri – Xply Small PC – Racing Bicycle Bicycle – Tubes PC – Retread Bicycle - Tires PC – SM Curing Curing Bladders PC – SM LRR Curing Envelopes PC – WT Flaps Flaps PC – UHP AS Ind Ind – Radial PC – UHP SM (Industrial) Ind – Retread PC – Xply Ind – Solid SCTR SCTR – Radial Ind – Xply (Scooter) SCTR – Xply

Inner Tubes Inner Tubes Small Other Small Other Kart Kart SUV SUV – AS LT LT – AS SUV – AW (Light Truck) LT – Eco SUV – Eco LT – Retread SUV – HP AS LT – SM SUV – HP SM LT – SM – LRR SUV – SM LT – WT SUV – SM LRR LT - Xply SUV – UHP AS MC MC – Radial SUV – UHP SM (Motorcycle) MC - Xply SUV – Winter Military Military TR TR – Radial OTR OTR – Giant – Radial (Truck) TR – Radial – Eco (Off Road) OTR – Giant – Xply TR – Radial – LRR OTR – Radial TR – Radial – WT OTR - Xply TR - Retread OTR – Retread/Repair TR - Xply Paints Paints Tweel (UPTIS) Tweel

Rubber Chemical Consultants Ltd | Office 7, 35-37 Ludgate Hill, London, EC4M 7JN. UK Registered Company, no: 06863349 The statements, opinions and/or recommendations contained herein are based on information believed to be reliable. However, Rubber Chemical Consultants Ltd makes no warranty or guarantee of accuracy or completeness in connection therewith, nor, with respect to any proposed application or course of action. Information included in this report is Confidential and shall not be copied, unless otherwise designated in the report or by written permission from Rubber Chemical Consultants Ltd. © Rubber Chemical Consultants Ltd 2018. Page 111 of 111 Rubber Chemical Consultants Ltd RCCL204 th Tire Precipitated Silica Industry & Markets 2020 30 October 2020

16 ADDITIONAL DOCUMENTATION

This report is accompanied by an Excel Workbook with data/figures from the pdf report.

Please refer to: RCCL204 – Client Data.