Carbon Black Price Decline (December 19)
Market Review: Bearish Sentiment Pressures Carbon Black Prices
Recently, domestic carbon black prices have generally trended downwards within a narrow range. New order negotiations in the carbon black market have been generally weak, with limited actual transaction volume. During the week, the raw material coal tar market showed weakness, with bidding prices declining across the board, resulting in significant cost-side headwinds. This increased pressure on the carbon black market to maintain prices, leading to some small orders being sold at low prices. Downstream markets continue to pressure for lower prices, and new tire purchases have not yet been finalized, with low willingness to accept goods. Previously purchased low-priced stock is still being shipped, resulting in substantial losses in the carbon black market. The room for price concessions on new orders is limited, and the weak consolidation trend in the carbon black market is unlikely to change.
Supply Side: Negative Factors Dominate, High-Temperature Coal Tar Prices Decline
The domestic high-temperature coal tar market is experiencing a widening downward trend. Following last week's price reductions in Shanxi province and downstream coal tar pitch, the only supporting factor for the coal tar market has weakened. Therefore, negative factors are dominating the market. This week, downstream factories are showing strong selling pressure, and new order prices in Shandong and Hebei provinces have followed suit. Since Shandong and Hebei did not lower prices last week, the declines this week are significant, exceeding 100 yuan/ton. The price reductions in Shanxi province have also widened. With numerous negative factors in the market, the coal tar market is expected to continue its downward trend in the short term.
The Shandong anthracene oil spot market has room for further decline. End-user participation is passive, and transactions remain stagnant. This week, the price of new orders in the high-temperature coal tar market mainly declined, weakening costs and suppressing the willingness of anthracene oil market participants to ship. The operating rate of deep coal tar processing plants continued to rise, with supply remaining stable to slightly increasing. Manufacturers still faced significant pressure to ship. The downstream market lacked any bright spots, and with new orders in the carbon black market declining and profits being eroded, the purchase of anthracene oil remained a matter of maintaining a tight supply strategy while pushing prices down. The anthracene oil hydrogenation market primarily accepted orders at lower prices, with downstream inquiries showing weak sentiment. Overall, the fundamentals of the anthracene oil market remained weak this week, and a continued downward trend is expected in the short term.
Downstream Demand: Tire Shipments Slow, Most Companies in Flexible Production Control Positions
China's semi-steel tire operating rate is 70%. China's all-steel tire operating rate is 64%. This week, tire operating rates declined slightly. Currently, shipments from various companies are slow, finished product inventories continue to rise, and under pressure to both production and sales, companies continue to flexibly control production. Some sample companies have experienced production stoppages or restrictions, dragging down the operating rate.
Market Outlook: Looking ahead, the raw material coal tar market is trending downwards, continuing to weigh on the market. The focus of new order negotiations in the carbon black market is declining, and downstream buyers are still mainly accepting low prices. The loss-making operation of carbon black has led to a narrowing of the current profit margin, and new orders for carbon black remain in a weak consolidation state, with limited decline in actual orders.
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