Weak Demand Dominates (April 27)
When "Weak Operation" Becomes the Main Theme in the Carbon Black Market
Market Review: The carbon black market saw stable new orders and little fluctuation in actual orders, maintaining stable shipments, mainly fulfilling previous orders. Raw material coal tar prices declined slightly, with weak cost-side pressures. Furthermore, some companies maintained a supportive stance on prices, which benefited new order negotiations. Overall, after large orders were completed, smaller orders fluctuated and consolidated in the carbon black market.
Raw Material Side: Coal Tar Continues to Fall, Cost Weakness Evident
Recently, market shipments have continued to weaken, and social inventory pressure has been rising. High-temperature coal tar is generally in a loose supply situation. On the demand side, affected by the shift from profit to loss for deep-processing enterprises, coupled with some regional manufacturers entering the spring maintenance phase, the operating rate of deep-processing has continued to decline, resulting in a weakening demand for coal tar. At the same time, previous purchases have decreased, further increasing inventory pressure on coking plants. To alleviate inventory pressure, low-price transactions have occurred frequently in the market, leading to a weakening trend in coal tar prices.
The anthracene oil spot market saw stable to slightly stronger offers. From the supply side, concentrated shutdowns in the coal tar deep processing industry led to an overall decrease in supply, easing pressure on holders to sell. On the demand side, the carbon black industry maintained just-in-time purchasing and currently showed no proactive bidding for the increased price of anthracene oil, with insufficient demand for anthracene oil hydrogenation. Despite the decreased supply, anthracene oil manufacturers remained firm in their sales strategy, pushing prices up steadily; downstream users maintained a buy-on-dips strategy, resulting in a continued stalemate in market transactions.
On the demand side: Southeast Asian shipments arrived seasonally, leading to clear destocking.
Zhou Quan Steel Tire's maintenance and production restrictions were gradually being lifted, providing some support to the overall operating rate. Domestic market transactions were lackluster. Even after some companies announced a second round of price increases, there was no significant impact on pre-stocking. Weak end-user demand, coupled with ample inventory at retail outlets, resulted in slow inventory digestion and insufficient continuous restocking capacity.
Most semi-steel tire manufacturers maintained stable production schedules, with overall operating rates fluctuating narrowly. Domestic market transactions were lackluster. Even after some companies announced a second round of price increases, there was no significant boost to pre-stocking. Weak end-user demand, coupled with ample inventory at retail outlets, led to slow inventory digestion and insufficient continuous restocking capacity.
Profit and Operating Rates: Profits Recovering but Operating Rates Remaining Weak
As of yesterday, the theoretical profit for N330 carbon black from Shandong carbon black plants was around 35 yuan/ton. The price of raw material coal tar continued to decline, reducing costs and lowering market profits. Furthermore, after new carbon black orders were signed, most plants maintained stable operations. With some small orders being sold, carbon black market profits recovered somewhat.
Domestic carbon black market operating rates declined. During the week, the operating rate of a major plant in North and East China decreased. A major plant in East China that had previously undergone maintenance is still under maintenance. Overall, the market operating rate declined slightly.
Looking ahead:
The raw material coal tar market is expected to continue its downward trend. Currently, high-level market transactions are facing increasing pressure, and the decline in the raw material market will likely widen further. Furthermore, downstream tire manufacturers have maintenance plans during the May Day holiday, leading to a decrease in demand in May, which will negatively impact the market. The carbon black market is expected to consolidate and decline.
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