China Carbon Black Price & Market Analysis
This week, domestic carbon black prices remained relatively stable, with slight increases in some regions. Prices were: Shandong 6800 yuan/ton; Shanxi 6600 yuan/ton; Hebei 6900 yuan/ton; Guangzhou 6850 yuan/ton; and Zhejiang 6900 yuan/ton.
Raw Material Side: Weak Market and Downward Turning Costs
The high-temperature coal tar market has entered a downward trend. Although this decline seems sudden, there were signs beforehand. First, last week's price increase for high-temperature coal tar exceeded market expectations, making the upward trend unsustainable.
Second, downstream products performed poorly, especially anthracene oil, which experienced significant sluggish sales, weakening the willingness of deep-processing enterprises to maintain prices.
Third, news of some downstream factories shutting down in Wuhai, Inner Mongolia, reduced demand for coal tar. As negative factors gradually increased, Anhui's Linhuan auctioned off its coal tar, leading to a significant decrease in participation from downstream factories and a downward price trend.
Subsequently, prices in all major producing areas declined to varying degrees, demonstrating a downward trend in the coal tar market. In the short term, downstream factories continue to stock up, and there is still some demand, but without new positive catalysts, the market remains weak.
The Shandong anthracene oil spot market is expected to see a decline from its high levels, with end-users being relatively passive in their market entry. This week, the price of high-temperature coal tar, a raw material, declined sharply from its high level. This significant drop in costs has a bearish impact on the anthracene oil market.
The operating rate of deep-processing coal tar decreased during the week. Although the overall supply of anthracene oil decreased slightly, the market still maintains a supply-demand imbalance. Holders are cautiously lowering their offers. The downstream anthracene oil hydrogenation market showed poor recovery before the Spring Festival.
The carbon black market, facing weakening raw material prices, continues to suppress prices. Overall, the anthracene oil market lacked positive factors this week, and actual transactions remained stagnant, with room for further price declines.
Demand-side: Factory operations remained weak, resulting in limited actual demand.
The operating rate of semi-steel tires in China was 74%. The operating rate of all-steel tires in China was 63%. During the period, some sample semi-steel tire companies were supported by export orders, leading to a slight increase in production, which supported the operating rate of these companies. Shipments of all-steel tires were lackluster, and some companies continued to control production, dragging down the operating rate slightly.
Operating Rates: Carbon Black Enterprises' Operating Rates Decline Slightly Amid Continued Profit Damage
Taking Shandong as an example, the price decline in the raw material coal tar market has widened, while the carbon black market price has temporarily stabilized. However, a further decline is expected in the future. Downstream markets have begun inquiries, but their ability to accept high prices is limited.
After the price decline, the carbon black market is expected to remain unprofitable. The operating rate of sample carbon black enterprises has declined slightly. Some large factories have chosen to reduce production lines to decrease inventory, resulting in significant market pressure and dampening enterprises' willingness to operate.
Downstream demand was generally weak before the holiday. Under the influence of negative demand factors, the carbon black market's operating rate is expected to remain low.
Overall: Supply and Demand Pressures Remain, Carbon Black Market Stabilization is the Main Focus
Looking ahead, new order negotiations in the domestic carbon black market are stalled, and quoted prices remain high. However, sporadic small-order transactions are occurring, and market negotiation pressure is significant.
Nevertheless, the willingness to sell at low prices has decreased, and cost pressures are significant, leading to high quoted prices in the carbon black market. A wait-and-see attitude prevails among industry players.
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