The market price of carbon black has dropped significantly this month. As of the end of the month, the domestic market price of N220 carbon black was at 10628.57 yuan/ton, a decrease of 9.1% from 11692.86 yuan/ton at the beginning of the month and a year-on-year increase of 54.49%.
In terms of raw materials, the mainstream price of high-temperature coal tar in Shandong at the end of October was 5560 yuan/ton, slightly higher than the beginning of the month, but the upward slope slowed down significantly; Anthracene oil weakened synchronously, and Shandong anthracene oil decreased by 200 yuan/ton to 5400 yuan/ton within the month. The profit margin of deep processing of coal tar is meager, and downstream resistance to high priced raw materials is increasing. Although the cost of carbon black is still at a high level, the driving force for continued upward movement has significantly declined.
On the supply side, the operating rate of the domestic carbon black industry in October was 58%, a decrease of 4.92 percentage points month on month and 9.34 percentage points year-on-year. Some large factories in Shandong and Shanxi are undergoing pre season maintenance for heating, resulting in slow resumption of small and medium-sized production capacity and a month on month contraction in output. However, the pace of downstream procurement has slowed down, and the pressure on manufacturers to ship has increased. Industry inventory is showing an upward trend, and the supply side is presenting a passive pattern of “low production and high inventory”.
In terms of the terminal market, although the operating rate of tire companies has improved after the October holiday, there is still a significant gap between all steel tires and semi steel tires compared to last year. The tire industry is generally in a loss making situation, and only maintains rigid procurement of carbon black, leading to strong pressure on prices. The mainstream transaction price of carbon black has been lowered by 200-300 yuan/ton within the month, and the demand side has formed a clear ceiling constraint on the price of carbon black.
Influencing factors: After the price of carbon black surged to nearly 12000 yuan/ton in September, the relative price advantage of domestic products over overseas products has significantly narrowed. Export orders have declined in October, and there is a high probability of a double decline in exports in the fourth quarter compared to the same period last year. The diversion effect of external demand on domestic supply will weaken. At the same time, coal tar supply is tight under the background of production restrictions by coke enterprises, and cost rigidity still exists, forming the core support force for the bottom of prices.
Market outlook: Based on the above fundamentals, the weak push up on the raw material side means that the cost drive is weakening, while the demand for tire losses is capped and exports are falling, resulting in a lack of any increment on the demand side. Carbon black lacks the conditions to emerge from an independent upward trend. It is expected that the carbon black market will be mainly volatile and weak in November, with the mainstream delivery price of N330 operating at a low level in the range of 9300-9600 yuan/ton; If coal tar experiences periodic price increases, carbon black may passively stabilize, but the downward transmission path to tires has been blocked by losses, and the industry’s profit recovery space is extremely limited.
| http://www.polyvinylalcohols.com |