Daily Review: Supply and Demand Stalemate, Carbon Black Market Expected to Remain Weak in Short Term

Market Review: On February 6th, the carbon black market was under pressure. The scattered transaction price for N330 was referenced at 6500-6700 RMB/ton delivered, with some individual higher or lower prices also present, and actual prices were subject to negotiation. Today, coal tar bidding prices in some regions decreased, and this downward trend is expected to continue in the short term, leading to a sustained weakening of cost support for carbon black. Towards the end of the week, carbon black enterprises primarily focused on consolidation. Market supply remained stable, but sales were sluggish, and carbon black inventory showed a slight accumulation, with the current focus on inventory digestion. In the downstream tire market, all-steel tires entered a seasonal off-peak period, and demand in the replacement market only maintained essential needs. Semi-steel tires, however, benefited from replacement demand driven by residents returning home before the Chinese New Year, with relatively good channel sales. Nevertheless, most tire manufacturers have sufficient carbon black inventory, leading to an overall negative demand outlook, further pushing down carbon black prices.

Carbon Black Regional Price: Unit (RMB/Ton)

Market Forecast: Next week, the coal tar and ethylene tar markets are expected to decline slightly, while the anthracene oil and carbon black oil markets are expected to remain stable. The deoiled slurry market is expected to fluctuate narrowly, and the overall carbon black feedstock market is expected to trend downwards, with continued weakening cost support. A few enterprises in Fujian plan to resume production this weekend, but with the approaching Spring Festival holiday and reduced downstream demand, sporadic enterprises in Jiangxi, Shandong, and Anhui are expected to shut down next week, leading to a decline in carbon black operating rates. Downstream tire enterprises in the all-steel tire sector will gradually enter the Spring Festival holiday next week, while the semi-steel tire sector will gradually enter the final stage of production. Tire operating rates will decline next week, further dragging down carbon black demand. Overall, carbon black market prices are expected to show a downward trend, with mainstream delivered prices around RMB 6300-6500/ton. It is recommended to pay attention to the trend of raw materials, changes in the supply and demand side of carbon black, and the impact of subsequent macro factors.