1、 Price trend
According to data monitored by Business Society, the domestic carbon black market prices were relatively strong at the end of June. On June 30th, the domestic carbon black N220 was quoted at 9033 yuan/ton. In the first half of 2023, the domestic carbon black market showed a significant decline followed by a rebound trend. On January 1st, the price of carbon black was 12050 yuan/ton, and on June 30th, it was 9033 yuan/ton. The highest price was 12050 yuan/ton, which appeared in January and the lowest point was 7900 yuan/ton, which appeared in May.
The first stage (1.1-2.28) saw a slight decline in weak oscillation operation
From January to February this year, the overall performance of raw materials was weak, with mixed ups and downs. Downstream enterprises did not have significant positive effects, and their enthusiasm for purchasing in the market was not high. The game between raw material fluctuations and downstream demand dragged on the carbon black market was weak.
The second stage (3.1-5.25) is a significant downward phase
The significant decline in raw materials from March to May is no longer supported, and prices fell significantly in March. The decline in April continued to expand. According to the price data of the business community, the market price of domestic high-temperature Coal tar fell sharply from April 12 to May 12, falling from 4750 yuan/ton to 2652.50 yuan/ton, down 44.16% in the cycle. Industrial naphthalene, anthracene oil, washing oil and coal tar pitch are the main commodities in the deep processing industry of Coal tar. Since the beginning of 23 years, the price of deep processing commodities has basically kept pace with the trend of tar. In the early stage, the price of Coal tar plunged sharply, which is also mainly affected by the sharp drop in the prices of these four commodities. In addition, enterprises have a large inventory backlog, which depresses the market price of Coal tar and reduces the auction price in many regions.
In the third stage (5.25-6.30), the trend of the callback stage is fluctuating and upward
In the middle and late May, the auction price of the domestic high-temperature Coal tar market rose sharply, and the auction price of each main production area rose to a certain extent. Some coke enterprises rose more than 1000 yuan, which strongly supported the cost of carbon black. The situation turned into an upward trend. In early June, the auction price of domestic Coal tar rose and fell, and the carbon black market maintained stable operation.
2、 Industrial chain
1 Cost side
Specifically, in the first quarter, the overall performance of raw materials was weak, with weak demand, and bearish factors gradually occupying the dominant position, resulting in a weak market situation for carbon black. In the second quarter, in the middle of May, as the auction price of the domestic high-temperature Coal tar market rose sharply, the auction price of each main production area increased to a certain extent. Some coke enterprises increased by more than 1000 yuan, which strongly supported the cost of carbon black. The situation turned into an upward trend. However, by the beginning of June, the auction price of domestic Coal tar had declined, and the carbon black market was stable. The carbon black market in the second quarter showed a “V” trend.
In July, the coke enterprises started to work and the supply of Coal tar increased. The coke enterprises are basically on the edge of profit and loss, and have improved compared to the previous period. The coke market has a willingness to push up, and the overall construction has gradually improved, but there may still be an improvement in the later stage.
Downstream deep processing starts relatively high, and support is just needed. The overall commencement of the deep processing industry is still at a high level, and no enterprise has a clear plan to stop production and reduce production. The demand for raw material Coal tar is good for the market. In addition, the demand for coal tar pitch is expected to recover, and there is still room for growth in the short term, but the momentum for continuous growth may be insufficient. It is expected that the market will be stable in the later period, which will be good for the Coal tar market.
In general, the Coal tar market is expected to remain stable after rising in July 2023 when it enters the second half of the year.
Downstream market
The main consumption proportions of carbon black in the downstream market are tire carbon black, rubber carbon black, plastic, etc., accounting for 66.7%, 22.2%, and 6.3% respectively.
In the first half of this year, the overall operating rate of downstream tire companies and other rubber product industries remained stable, finished product inventory was at a reasonable level, and the enthusiasm of enterprises to purchase goods was average. However, the performance of the rubber products and plastic masterbatch industries was flat, with purchases mainly in demand. June was the traditional off-season for lower cruise tire sales, and the demand side further weakened. The market was mostly in a wait-and-see state, and the bearish atmosphere gradually deepened, with transactions in the carbon black market being weak. Mainstream tire manufacturers have a strong sentiment towards suppressing carbon black, and market operators have low enthusiasm for receiving goods. There is currently no obvious positive news in the market.
3、 Changes in commencement and production capacity
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1. Changes in commencement
In the first half of 2023, the average operating rate of Chinese carbon black enterprises was 56%, a year-on-year decrease of 5.5%.
From January to March, with the support of cost inventory, the enthusiasm of downstream tires for the purchase of carbon black goods has not improved significantly. Under the influence of the continuous decline of Coal tar, the end users have a bearish attitude, and the purchase of goods into the market is just a demand.
From April to May, the operating rate continued to decline. As the overall price of Coal tar fluctuated and declined, the pressure on carbon black production costs continued to weaken. Some carbon black enterprises, supported by a certain amount of inventory, reduced their operating load and dragged down the operating rate. In addition, the overall construction of the carbon black industry has declined due to the maintenance plans of some carbon black enterprises in certain regions.
2. China’s carbon black production capacity and growth rate from 2016 to 2021
Incomplete statistics show that in 2023, the total capacity of China’s carbon black market will be about 9.5 million tons, an increase of 990000 tons compared with last year, and the overall capacity will increase slightly, with East China and North China accounting for the largest proportion of carbon black capacity.
4、 Changes in imports and exports
1 Import
According to customs data, the total import of carbon black in China increased significantly from January to May 2023, with the most significant increase in May. The cumulative import quantity of carbon black in China is 107000 tons, an increase of 65600 tons compared to the same period last year, and a year-on-year increase of 158.8%.
In the first half of 2023, the total import volume of carbon black in China significantly increased compared to the same period last year, with both year-on-year and month on month increases. The main reason is that considering the production of carbon black from high priced raw materials in the early stage, domestic carbon black prices remain high throughout the month. Terminal enterprises have limited acceptance of high carbon black prices, and some downstream factories have high resistance to high carbon black prices, so they choose to partially import carbon black to replace domestic carbon black, Drive an increase in the import of carbon black.
2 outlets
According to customs data, the total amount of carbon black exports from China decreased slightly from January to May 2023. The cumulative total export volume of carbon black in China is 255200 tons, a decrease of 76500 tons compared to the same period last year, a year-on-year decrease of 23%.
Compared to imports, China’s carbon black export volume decreased year-on-year and slightly increased month on month, but the overall export volume is relatively low.
5、 Future Market Forecast
In the short term, the raw material Coal tar or high level is temporarily stable, while the downstream deep processing and carbon black enterprises are slightly weak in receiving high price Coal tar, and their enthusiasm for receiving goods may be weakened. The traditional off-season for tire companies has not yet ended, and downstream tire sales pressure is not decreasing. There are currently many bearish factors in the carbon black market, and in the second half of 2023, the carbon black market prices may show a trend of weak range fluctuations.
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