In the traditional peak season of September and October, the Carbon Black market has set off a new round of price increases.
As of September 26th, the price range of carbon black N330 in the Shandong market is between 9800 yuan/ton and 10200 yuan/ton, with an average price increase of 11.19% in September compared to August; In October, the carbon black market price remained at a high level.
With the stable operation of downstream carbon black product enterprises such as tire factories and the strong demand for procurement and replenishment, the demand for carbon black remains high. The strategy of carbon black factories' reluctance to sell and price up products has further driven the price increase in the carbon black market. In addition, the high level operation of carbon black raw materials such as high-temperature coal tar has also played a certain supporting role in the high price of carbon black. It is expected that the carbon black market will continue to maintain a high and strong operating trend in October.
Currently, industry demand is on the rise, which has led to price increases. In addition, due to the sharp increase in raw material prices, the cost of carbon black has also increased. In order to alleviate the pressure, enterprises can only take price increase measures.
Prices have been rising all the way
Carbon black is one of the core materials of industrial economy and has irreplaceable importance. Its upstream products include high-temperature coal tar, anthracene oil, ethylene tar, etc., while its downstream products cover multiple fields such as tires, coatings, inks, and other rubber products.
Since September, the price of carbon black in the market has been continuously rising, constantly reaching new highs in the second half of the year. As of the end of September, some mainstream carbon black production enterprises' shipping prices have exceeded the 10000 yuan mark, showing strong market trends.
As of September 26th, the price range of carbon black N330 in the Shandong market is between 9800 yuan/ton and 10200 yuan/ton, with an average price increase of 11.19% in September compared to August.
It is understood that the raw materials for carbon black production include coal tar, anthracene oil, carbon black oil, etc., of which coal tar is the main component. The changes in supply and demand of raw oil and the fluctuations in international crude oil prices will have a direct impact on the production costs of enterprises.
In September, the coal tar market maintained stable operation after rising prices. As of September 28th, the domestic price of coal tar in the market was 4947 yuan/ton, compared to 4550 yuan/ton at the beginning of September.
In early September, with strong demand, the coal tar market continued to rise, and carbon black prices rose due to cost driven factors; In mid September, the bearish atmosphere in the coal tar market intensified, and prices in the main production areas followed suit. However, the supply of coal tar on site is relatively tight, and with the support of downstream demand, the downward trend of coal tar is relatively small; Entering the end of September, the operating rates of deep processing and carbon black enterprises have rapidly increased, driving up the price of coal tar. It is expected that the short-term coal tar market will operate in a narrow range of fluctuations.
In addition, the carbon black market has been in a state of oversupply for a long time, and with the arrival of the "Golden Nine Silver Ten" peak season, the industry's supply and demand structure has significantly improved.
In September, the low inventory level of the carbon black industry decreased, and the main reason for the tight market supply and rising prices was due to the shortage of goods and rising prices. There are two main reasons for the decline in inventory of domestic carbon black enterprises. Firstly, the low inventory of carbon black in the early stage resulted in limited supply. The actual stock of carbon black in the tire factory is not large, so the purchasing enthusiasm is high in the short term, and the digestion of carbon black inventory is still acceptable; Secondly, the weak capacity of the carbon black product sector to undertake high priced carbon black has led to inventory accumulation. However, due to the relatively small proportion of the product sector in the overall carbon black demand, the impact on the inventory of carbon black factories is not significant. Nevertheless, dealers' concerns about future carbon black prices and their behavior of stocking up in advance have to some extent consumed the inventory of carbon black factories.
In September, the inventory of domestic sample carbon black enterprises reached 203600 tons, a decrease of 6.39% compared to August and an increase of 0.65% compared to the same period in 2022.
In September, the overall operating load of the downstream tire market remained high, and the demand for carbon black steel remained relatively stable. Data shows that in September, the average operating load of all steel tires for tire enterprises in Shandong region was 62.82%. Although the inventory of carbon black in tire factories is not high, the operating rate is at a high level, so the demand for carbon black is very strong. In this situation, carbon black enterprises have a high bargaining power, allowing their prices to remain high and rise.
Relieve the pressure of losses
Against the backdrop of market recovery, in order to make up for the losses in the first half of the year, companies generally tend to maintain high prices in the second half of the year.
As of October 13th, the operating range of carbon black market prices in Shandong region is between 9800 yuan/ton and 10200 yuan/ton, which is equivalent to the average price in early October.
The main reason for the high price of carbon black in October. Firstly, the inventory of carbon black factories is at a low level, and the supply of some models is relatively tight. Operators are reluctant to sell at high prices, resulting in high shipping prices; Secondly, downstream tire and other product enterprises are operating well and reserving for future demand. The carbon black market is executing orders for shipment, and there is currently no significant shipping pressure; Thirdly, the supply of high-temperature coal tar is relatively tight, and due to the impact of capacity reduction, the price of coal tar is relatively strong, which supports the cost of carbon black; Fourthly, the demand for non tire and other products is relatively flat, but mainstream carbon black manufacturers mainly supply tire factories, which has a relatively small impact on the market.
In addition, it is worth noting that after entering 2023, the carbon black industry has continued the previous year's slump, with unsatisfactory economic indicators. Due to the pressure from upstream and downstream, enterprises have suffered serious losses and insufficient development momentum.
From the performance of the first half of this year, some listed companies in the carbon black industry experienced losses in profits.
In the first half of 2023, the profits of carbon black enterprises nationwide decreased significantly. Due to the rapid and significant decline in the price of high-temperature coal tar, most carbon black enterprises have high inventory of raw materials that cannot be quickly digested. In addition, the sales of produced products are difficult, and the shipment speed of carbon black is slow, resulting in a large inventory of high priced carbon black. Therefore, the losses of carbon black enterprises continue to worsen, and the prices of coal tar have plummeted. Carbon black enterprises have a large inventory of high priced raw materials, and are actually facing significant operational loss pressure.
