The carbon black market may be about to turn around
Market Review: At the beginning of the week, downstream buyers were largely hesitant, with low purchasing activity as they waited for market lows to emerge. Furthermore, the continued decline in the raw material coal tar market negatively impacted the carbon black market, leading to a significant downward trend. However, towards the end of the week, mixed bidding prices for raw material coal tar led to a gradual increase in bullish sentiment in the region. The willingness to sell at lower prices was low, resulting in limited new order negotiations. The downward trend in the market halted, and the carbon black market gradually stabilized with price support.
Raw Material Side: Mixed Coal Tar Prices Strengthen Support
The domestic high-temperature coal tar market saw mixed price movements. At the beginning of the week, the coal tar market continued to digest negative factors, operating quietly with a wait-and-see attitude. With the release of auction prices in major producing areas, the market entered a state of uncertainty. This was mainly due to the continued downward trend in Shandong and Hebei as they digested negative factors, although the decline narrowed significantly. Meanwhile, Shanxi, driven by immediate demand, saw an initial rebound. The mixed auction prices in major high-temperature coal tar producing areas suggest that the market is poised to shift from weak to strong.
Domestic anthracene oil prices saw a decline in some areas. At the beginning of the week, the drop in new order prices for high-temperature coal tar, a raw material, significantly suppressed the sentiment of anthracene oil holders. Manufacturers tentatively lowered their offers, while downstream carbon black producers maintained a downward pressure on prices and a persistently bearish outlook, resulting in low actual transaction volumes.
Towards the end of the week, high-temperature coal tar auction prices fluctuated. Following a strong price increase in Shanxi, anthracene oil manufacturers showed some willingness to follow suit with higher offers. Downstream buyers remained cautious, and the demand for anthracene oil in the hydrogenation market was insufficient. Carbon black companies intended to lower prices for their purchases. The anthracene oil market is expected to remain stable in the short term.
Demand Side: Tire Plant Production Recovers
China's semi-steel tire operating rate is 63%. China's all-steel tire operating rate is 65%. Tire repair companies are gradually resuming production, driving an upward recovery in overall operating rates. Currently, many companies have weak order performance and slow shipments. Temporary maintenance and production control measures persist, limiting the overall increase in operating rates.
Regarding semi-steel tires, the overall market for all-season tires remained weak. However, rising temperatures in many parts of southern China, coupled with increased summer travel, led to a slight recovery in regional market transactions. In Northeast China, some traders have begun replenishing their snow tire stocks, with the stocking cycle starting earlier than in previous years.
As for all-steel tires, overall transactions were weak throughout the period, with sales falling short of expectations, exhibiting a "weak peak season." On the one hand, end-user demand has not shown significant improvement; on the other hand, there is a general bearish expectation in the market, leading to cautious stocking by distributors and a wait-and-see approach to factory pricing policies. Currently, mainstream market prices remain stable, but there is room for negotiation in actual transactions.
In summary: Upstream support is showing signs of improvement, and carbon black may rebound
From a cost perspective, raw material prices have room for further increases, which is favorable for market quotations. Furthermore, the downstream tire market is in a negotiation period, with increased purchasing activity, leading to a rise in positive sentiment in the market and improved expectations for new orders in the carbon black market.
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