China Carbon Black Market (February 25)
Raw Material Side: Market Stable with Slightly Weak Cost Support
The domestic high-temperature coal tar market remains stable with a wait-and-see attitude. Following the holiday, the market lacks auction price guidance, leading to a strong wait-and-see sentiment.
As the market gradually returns to normal and downstream factories resume operations, some factories that operated normally during the holiday have largely depleted their raw material inventories. Demand for coal tar remains strong, thus the expectation for post-holiday price increases is relatively strong.
The domestic anthracene oil market saw weak new order negotiations after the holiday. On the first day of resuming work, no new tenders were issued for high-temperature coal tar, providing insufficient guidance for anthracene oil shipments.
Market participants continue to adopt a wait-and-see approach, with weak willingness to offer prices. Downstream demand is gradually recovering, and the market is continuing its just-in-time purchasing strategy. The anthracene oil market is expected to find support at its bottom in the short term.
Demand Side: Tire Manufacturers Resume Production, Operating Rates Improve
Before the Spring Festival, the all-steel tire market remained under seasonal pressure. Some companies suspended operations at the end of January, while most gradually suspended operations between the 20th and 23rd of the twelfth lunar month, with the overall pace largely unchanged from previous years.
Semi-steel tire manufacturers, supported by concentrated production of European orders, delayed their holiday plans, mostly suspending operations between the 25th and 28th of the twelfth lunar month. Looking ahead to the post-holiday period, stimulated by promotional policies and sales targets, dealers will replenish their inventory in stages, leading to a short-term rebound in shipments.
Coupled with the post-holiday production recovery cycle, tire inventory will likely see channel depletion in the short term. However, end-user replacement demand remains constrained by logistics, the pace of infrastructure resumption, and consumer wait-and-see sentiment. Substantial end-user demand will gradually be released after March, while OEM demand will also need to wait for a full recovery in automobile production and sales.
Resumption of Operations: Carbon black companies, whose profits continue to be negatively impacted, are gradually resuming operations. New orders for carbon black in the domestic market are scarce after the Spring Festival holiday, and the market atmosphere is calm. No new orders for raw material coal tar have been announced yet, and downstream buyers have not yet entered the market to purchase, resulting in low transaction volume.
Taking Shandong as an example, carbon black prices are currently stable, as are raw material coal tar prices, but the carbon black market remains unprofitable. The Spring Festival holiday runs throughout February, with most companies gradually entering holiday mode around February 10th and restarting around February 22nd. The insufficient actual production days will significantly drag down the overall capacity utilization rate for the month.
Overall Outlook: Supply and Demand Expected to Improve, Carbon Black Market Maintains Prices
Looking ahead, no tenders were issued for raw material coal tar on the first day after the holiday, leading to a wait-and-see attitude among market participants. However, downstream demand supports an upward trend in the raw material market, and the tire market is gradually resuming procurement after resuming production. Therefore, there are positive factors supporting the market, and the carbon black market is expected to maintain prices.
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