The rise in coal tar prices is boosting, while carbon black is running stronger

September 13, 2024

This week, the mainstream of coal tar continues to dominate, with strong cost support for Carbon Black. Mainstream carbon black manufacturers continue to sell at high prices.

From the perspective of raw material situation, the price of steel has fallen, market sentiment is sluggish, coupled with the continuous reduction of coke prices and the stabilization and rebound of coking coal prices, which has led to the expansion of losses for coke enterprises and the continued decline in production. According to statistics from the Carbon Black Industry Network, the operating load of coke enterprises this week was around 68.42%, and the supply of coal tar in the market continues to shrink. Currently, the deep processing industry is operating at a low level, with increasing losses and rising cost pressures. However, the rise in the price of coal tar, the main product of deep processing, has provided some profit margin for enterprises, and the demand for coal tar is still acceptable. But as the enthusiasm of downstream factories to participate in auctions decreases, the mainstream price increase of coal tar has narrowed this week, especially with a slight decline in the auction price of new coal tar orders in Anhui region, which has had a certain impact on the mentality of downstream factories, and the market's wait-and-see sentiment is gradually heating up.

From the perspective of the carbon black market, the price of carbon black continued to operate steadily this week, and manufacturers were more active in receiving goods, providing support for the upward trend of coal tar prices. The overall operating load of the industry did not fluctuate significantly during the week, driven by downstream demand. In the early stage, carbon black manufacturers had a good situation of receiving orders. According to market feedback, some carbon black manufacturers have received orders until mid to late September. Currently, many carbon black manufacturers are executing orders and shipping, and the inventory on site is generally not high.

From the demand side, the current demand for carbon black is stable, and both full steel and semi steel tires showed a slight increase during the week. The overall operating load of full and semi steel tires were 60.39% and 79.29%, respectively; The performance of other rubber products and masterbatch industries is improving, mainly through on-demand procurement.

Overall, on the one hand, carbon black orders are good and there is not much fluctuation in production in the short term. On the other hand, the downstream tire main market has stable demand, coupled with the implementation of the old for new policy in various regions, terminal demand and orders will gradually be released, which may drive the improvement of domestic replacement market and supporting market demand. The market expectations for other rubber products and masterbatch are optimistic. Overall, it is expected that the price of carbon black will be strong.

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