Carbon Black Market Weekly
Market Review: This week, the carbon black market saw new order negotiations initially rise before falling. Although offers increased at the beginning of the week, downstream buyers remained cautious, resulting in limited actual transactions. Subsequently, the release of raw material bidding prices exacerbated the bearish sentiment, leading to a decline in new order offers.
With the tire market set to begin price negotiations next week, downstream buyers showed little enthusiasm for this week's negotiations, exhibiting a strong wait-and-see attitude and waiting for prices to fall, resulting in a stalemate in new order negotiations.
Raw Materials: Weak Market and Downward Turning Costs
The high-temperature coal tar market has entered a downward trend, with bearish factors gradually dominating the market. On the one hand, downstream resistance emerged after last week's price surge; on the other hand, prices for deep-processed small products generally fell this week, coupled with the arrival of the spring maintenance season, with some deep-processing enterprises having maintenance plans and focusing primarily on digesting raw material inventories. These multiple factors combined put downward pressure on the market.
Demand Side: Significant Divergence in Downstream Operations
Regarding semi-steel tires, while some tire companies announced price increases during the cycle, other companies showed little willingness to follow suit, and the market has not yet seen a concentrated stockpiling phenomenon triggered by price increases. Currently, Northeast China and Inner Mongolia are in the peak season for all-season tire demand, with distributors relatively actively stockpiling; other regions are mainly focused on regular stockpiling, and overall transaction prices remain stable.
Regarding all-steel tires, some companies began implementing price increases on March 16th. Before the price increases, distributors' enthusiasm for stockpiling significantly increased, and distributors of other brands also showed increased willingness to stockpile, accelerating the turnover of best-selling models.
Although the recovery of actual end-user demand will still take time, driven by the unexpected increase in raw material costs, market expectations for tire prices to "rise more easily than fall" have intensified. Since current transactions mainly involve pre-price-increase inventory, transaction prices remained generally stable compared to the previous period.
Operating Rates: Profits Improve, but Plant Operating Rates Decline Slightly
The price of raw coal tar in Shandong Province declined, while the price of carbon black remained stable. New orders are under negotiation, and the carbon black market has shifted from a loss-making to a profitable state. During the cycle, the prices of raw materials such as natural rubber and additives decreased, dragging down the tire raw material cost index and improving profit levels.
The operating rate of carbon black companies declined slightly. Some companies in East China underwent maintenance, and at the same time, the heating season in northern China ended, with some companies having maintenance plans, leading to a decline in the market's operating rate.
Overall: Supply and Demand Pressures Remain, Carbon Black Market May See Further Declines
Looking ahead, the domestic raw coal tar market price is trending downwards, and declining downstream demand is negatively impacting negotiations. New orders in the carbon black market are dragged down by these negative factors. However, new orders in the tire market are being negotiated, and manufacturers have limited room for price concessions, limiting the market decline. The carbon black market is expected to remain weak in the short term.
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