Black China Blog

Industry icon Bob Dickie left Oxbow earlier this year, leaving a large gap (no pun intended) in the fabric and colour of the global carbon industry.    I know when I was dealing with Bob in his capacity as Vice President of Sales and Marketing for Great Lakes Carbon, I found him to be extremely knowledgeable, pragmatic and very honest.  

So it was my pleasure and honour to be able to grab Bob in a spare moment and put a few questions to him.

Bob, thanks for agreeing to do this interview.   How are you enjoying your new life, post Oxbow?

After working full time for 40 years, I am enjoying some extended time off.     It is giving me time to improve my well-being as well as spend more time with family and my grand children who live nearby. It is also surprising how much there is to do to get things in order for future retirement. I have also decided to do some consulting and thus am able to stay in touch with many people in the industry and around the world.

 

 

Tell us a little of the Bob Dickie story.   When did you first get carbon in your veins?   How did your career progress?

After graduating from the University of Pittsburgh as a Chemical Engineer I spent a few years in the steel industry as an Environmental Engineer.   I joined what was to become the Alumax company where I spent the next 16 years involved with smelter expansion and operations, first at Eastalco in Maryland and then as part of the team to build and operate the last new greenfield aluminium smelter built in the United States, Mt Holly in South Carolina.    

 

I was fortunate enough to work for a very progressive management team at Alumax and was given multi-disciplinary responsibilities, initially as Technical and Environmental Director and the last five years as Carbon manager.    The smelter enjoyed a worldwide reputation as employing state of the art technology, progressive management techniques, and achieved record performance and efficiencies.

 

In 1989 I was able to further apply my experience when I joined Great Lakes Carbon (GLC) as Plant Manager at their Enid Oklahoma calciner and then in 1992 relocated to New York to focus on Commercial and Sales activities on a Global basis.   GLC relocated their Commercial and Sales offices to Houston Texas in 1995 where I have remained.

 

Oxbow purchased GLC in May 2007. I was fortunate to work for and with many people over the years that always strived to be the best and to help those around them be the same.   For that I am very grateful and lucky.

 

 

In the years especially since the early 2000’s, the market seems to have been a lot more volatile than previously.   Relationships seem to have taken second place to price.   Is that how you read the changes?      If not, how has the market evolved, and why?

-It depends on your perspective. The market was not very volatile prior to the early 1980′s because there was little competition and plenty of raw material (GPC) to calcine. Since then and after 2000 demand has grown worldwide with the growth of smelting and at the same time many new calciner competitors entered the market, including oil companies that decided to add value to their GPC. This caused a lot of volatility as demand, supply, and prices were affected by to much calcining capacity and events such as the mid 1990′s Aluminium MOU.

 

At the same time there was a fundamental shift of Aluminium capacity growth towards lower cost areas of the world, which also affected demand.   Hence later the rapid increase in CPC prices in 2007 and 2008 in order to meet record demand.   Since 2000, major suppliers began consolidation and primary competition emerged from China and India, for which the smelters needed evaluate and adjust to this new supply scenario.   This included the acquisitions of the two largest merchant calciners, GLC and CII, in 2007.

 

Relationships are still very important as supply security is necessary to ensure smooth smelter operations, but at the same time if the smelters’ profitability is not sustainable then costs must be reduced in order to compete and survive, and as we know some did not make it.   It may be synonymous with burning the deck chairs to fire the ship’s boilers during a storm, but action needs to be taken to make it thru.

 

The markets will adjust and stabilize for a period, but recent volatility helped drive home the point that at the 2008 level of demand there was not enough anode grade quality GPC or enough CPC to meet that demand.  As a result the industry producers and buyers will have to develop a strategy to deal with the present as well as a return of demand in the future. Relationships are the best way to deal with this but my advice as noted in a Steven Spielberg movie is to ” Choose Carefully”.

 

 

20 years ago, there were predictions of a shortage of anode grade coke for the smelter market.     In recent years, the same predictions have been getting a lot of airplay.   Are these predictions finally coming true, or do you think the market will evolve its way out of the problem?

Relative to my earlier comments these predictions about shortages of anode quality GPC and CPC came true in 2007 and 2008 and were a fundamental reason for the rapid price increases.  With the current slackening of demand the pressure has been taken off temporarily but the fundamentals are still there and specifications and volatility in the Aluminium industry will continue and resurface as demand returns and oil refineries process more sour crudes.

 

 

In the same vein, what do you make of the calls for increased use of Non-Traditional Anode-grade Cokes (NTACS)?     Surely the smelter market simply cannot afford to reduce the quality of its anodes?

-NTAC’s have been used for many years to fill the shortage of anode grade quality GPC. Smelters’ anode quality has been affected but many have adjusted and will continue to adjust by investing in anode plant process improvements that can help stem the deterioration that could occur as more NTAC’s are used.

 

 

When did China first come onto your personal radar?   When did you first start to take notice of what was happening here?

GLC was the first western calciner to utilize Chinese GPC to produce CPC commercially for the Aluminium industry in the early 1990′s.  This was done through a cooperative effort with Pechiney and then was followed by further additional separate initiatives to assess the best possible sources of Chinese GPC and CPC after which sustainable commercial relationships and a supply chain was established.

 

 

How has the China market evolved since that time?    Is it heading in the right direction?    Is the China supply market truly a part of the global market, or are they still operating on their own terms?

Since that time China has evolved through its own rapid growth in Aluminium smelting and oil refining such that they have become a player in the global market.   All the major calciners, with the exception of some integrated producers, have actively pursued GPC supply from China, and all major Aluminium producers have initiated procurement strategies within China including purchase of carbon anodes and cathodes.

 

Although the Chinese are part of the global market, they are still influenced by their long trading history and past commercial practices with raw materials and in many cases the supply chain security required in the west still has many questions to be answered.

 

 

Many thanks Bob.

Thanks for the opportunity to make a few comments and offer my opinion. I would like to thank the many people I have met as customers and producers over the years and perhaps I will see some of them during my consulting ventures. I have visited 87 different smelters during my career around the world.  Maybe I will see a few more ?