The development of the world's Carbon Black industry is developed with the development of automobile and tire industries. In the first half of 2020, the supply and demand of carbon black will fall due to public health events and the collapse of crude oil. In the second half of 2020, the market price of carbon black will rise. The market price of carbon black is stable and rising, and the market is expected to continue in the coming year.
Application classification of carbon black: more than half of tire demand
At present, China's tire industry and carbon black industry are changing from high-speed growth stage to high-quality development stage. With the increasing constraints of resources and environment on the industry, the development of the industry is full of complexity and uncertainty, and also faces more opportunities and challenges. Carbon black is one of the most important raw materials in the tire manufacturing industry, accounting for 24% of the cost of radial tire, and the demand of carbon black from tire accounts for more than 67% of the main uses.
Downstream demand for carbon black recovered steadily
Automobile production and sales decline narrowed
According to the statistics of China Automobile Association, from 2011 to 2017, China's automobile production and sales are growing. In 2018, China's automobile output was 27.809 million, and its automobile sales was 28.081 million, ranking first in the world for ten consecutive years. However, affected by the slowdown of economic growth, the Sino US trade war, the decline of consumer confidence and the introduction of preferential policies on purchase tax, China's automobile production and sales all fell slightly. In 2019, China's automobile production and sales reached 25.721 million and 25.769 million respectively, with a year-on-year decline of 7.5% and 8.2% respectively.
Affected by the government's strategy to expand domestic demand and various policies to promote consumption during the epidemic period, China's automobile production and sales in 2020 will be 25.525 million and 25.311 million respectively, with a year-on-year decrease of 2% and 1.9% respectively, and a decrease of 5.5 and 6.3 percentage points respectively. Overall, the auto industry performed better than expected.
China's car ownership is growing
In recent years, the rapid development of China's automobile industry has led to the continuous increase of car ownership. According to the data released by the Ministry of public security, China's car ownership will increase year by year from 2012 to 2019, with a compound growth rate of 13.4%. In 2019, China's car ownership is 261.5 million, with a year-on-year growth of 12.6%. In 2020, China's car ownership will reach 281 million, an increase of 21 million over 2019, with a year-on-year growth of 8.08%.
From 2012 to 2019, the number of private cars (small and micro passenger cars) in China is increasing year by year, and the proportion of private cars in the total number of cars in China is on the rise. According to the data released by the Ministry of public security, the number of private cars in China will reach 207 million by the end of 2019, exceeding 200 million for the first time, with an average annual growth of 19.66 million in the past five years.
Under the background of Sino US trade war, EU "double anti" and large tire enterprises building overseas factories, domestic semi steel tire production still has some room for growth. In 2020, the situation that carbon black pricing is easy to fall but difficult to rise is expected to be broken, and the bargaining power between carbon black and downstream enterprises is expected to be improved.
Rubber tire production overall down, import and export orders fell
Statistics show that in 2019, the domestic output of rubber tire casing was 842 million, up 1.9% year on year; in 2020, the domestic output of rubber tire casing was 818.47 million, down 2.9% year on year.
From January to October 2020, the total export volume of carbon black was 533000 tons, down 21.6% compared with the same period last year, and the total import volume of carbon black was 71000 tons, up 14.3% compared with the same period last year.
Capacity blocked, carbon black supply tight
China is one of the first countries in the world to produce carbon black. China's carbon black production will increase year by year from 2015 to 2019. In the first half of 2020, China's carbon black output was only 2.22 million tons, a year-on-year decrease of 6.4%. In 2020, China's demand for carbon black is about 4.23 million tons. In addition, the second half of the second half of the year is approaching the end of the 13th five year plan and the blue sky defense war, the air pollution control policy requirements in autumn and winter of 2020-2021 are particularly strict. The areas involved include the main carbon black production areas, and the enterprises are required to limit the production by 20-50%. The affected production capacity of the carbon black industry is nearly 2.8 million tons.
In 2020, the supply of carbon black production enterprises is tight: the low inventory of carbon black enterprises and the blocked start-up load of the industry lead to the short supply of carbon black.
The gap between supply and demand drives the price of carbon black to rise steadily
Demand for carbon black will pick up and growth rate will rise in 2020
From 2015 to 2019, China's demand for carbon black increased year by year. In 2018, China's demand for carbon black was 4.935 million tons, a year-on-year increase of 0.55%; in 2019, China's demand for carbon black was 4.982 million tons, a year-on-year increase of 0.96%. The growth rate of carbon black demand increased. In the second half of 2020, driven by the better downstream demand, the operating rate will gradually increase to 60%, and gradually return to the level of 2019, and the downstream demand will continue to pick up.
In terms of tire prices, data show that from 2018 to June 2020, the overall price of car tires showed a downward trend, and stabilized in September 2020. The average price of truck and bus tire dealers ended to fall, and the price began to rise. The rise of tire price also further led to the rise of carbon black price.
In terms of carbon black price, the overall price trend showed a rapid decline from 2018 to March 2019; from the second half of 2019 to September 2020, the overall price was relatively stable, and as of December 2020, the price of carbon black for rubber was 7060 yuan / ton, rising steadily.
Throughout the carbon black market in 2020, from January to may, affected by public health events, crude oil plummeting and other factors, the supply and demand of carbon black fell. In the second half of the year, with the rise of car ownership, the demand for tires rose. From the beginning of June, the market price of carbon black entered the upward channel. In the short term, the market price of carbon black will still be strong, and there may still be upward space in the future, and the profits of enterprises will be low in the short term There is still room for expansion.
Demand side: the domestic tire demand market has gradually entered the traditional off-season. Meanwhile, the tight export shipping and the obvious increase in freight have also caused a certain drag on tire export. However, the inventory of tire enterprises is still in a reasonable range. The short-term performance may be high and continuous, and the demand for carbon black is relatively strong. It is expected that it will take more than two months for the carbon black inventory to increase to the normal level. The supply and demand performance is good The black business may still hold the price. In 2021, it is expected to continue the upward trend at the end of last year.
