Carbon black prices begin to decline
Market Review: This week, domestic carbon black prices showed a significant decline. By the end of the week, prices were: Shandong 7300 yuan/ton; Shanxi 7100 yuan/ton; Hebei 7400 yuan/ton; Guangzhou 7500 yuan/ton; and Zhejiang 7300 yuan/ton. New orders for raw material coal tar also declined, with cost pressures remaining a significant factor. Negative negotiated prices for new carbon black orders led to lower offers, and downstream buyers maintained their pressure to lower prices, resulting in a clear downward trend in carbon black prices.
Raw Material Side: Coal Tar Price Decline Expands
The domestic high-temperature coal tar market continued its downward trend, with the decline widening further. Since coal tar prices began to fall last week, coal pitch has been dragged down by costs, with the price drop exceeding that of the raw material itself. Deep-processing enterprises have fallen into losses, market sentiment is bearish, and traders continue to pressure for lower prices, causing coal tar prices to accelerate their decline this week. Despite the surge in international crude oil prices driving up prices for minor oils and industrial naphthalene, the market for the two core downstream products, coal tar pitch and carbon black, weakened, with overall negative factors dominating. Coal tar prices are likely to continue their downward trend in the short term.
This week, new orders for high-temperature coal tar saw a significant decline, leading to cautious selling sentiment among anthracene oil traders. Weakening raw material prices have reduced the operating rate of coal tar deep-processing units, resulting in a contraction in anthracene oil supply. However, declining costs have suppressed downstream purchasing intentions, with anthracene oil hydrogenation plants operating at low capacity and unable to accept current anthracene oil prices.
Anthracene oil demand is highly dependent on the carbon black industry, and the continuous decline in new carbon black order prices and pressure on corporate profits further squeezes the pricing power of anthracene oil. Overall, anthracene oil is caught in a double whammy of negative factors from upstream raw materials and downstream demand, resulting in a continued weakening of actual transaction prices in the market.
Demand Side: Overall, Prices Remain Low
China's semi-steel tire operating rate is 57%. China's all-steel tire operating rate is 63%. This week, tire operating rates showed divergent trends. Some semi-steel tire manufacturers had 3-5 days of maintenance scheduled, dragging down their capacity utilization rates. For all-steel tires, some manufacturers that had previously undergone maintenance gradually resumed production at normal levels, leading to a recovery in their capacity utilization rates.
Overall: Weakness in both upstream and downstream sectors indicates a downward trend in carbon black prices
On the cost side, the high-temperature coal tar market continued its downward trend. Due to the significant drop in coal tar pitch prices, the market remained predominantly bearish, and coal tar prices are expected to continue to decline, significantly dragging down costs.
Downstream buyers' enthusiasm for purchasing carbon black decreased, with a strong wait-and-see attitude prevailing this week. Therefore, market transaction volume was limited, with some only placing replenishment orders for immediate needs. Tire market purchases were limited, with most orders placed at the lowest possible price. Thus, the market was clearly bearish, and a decline in new carbon black order prices is expected.
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