1、 Basic situation of Carbon Black in the fourth quarter
The overall price of carbon black declined in the fourth quarter, and the carbon black market began to decline in mid October. Although there was a slight increase in price in mid November, it fell again under the strong drag of a bearish atmosphere. As of December 27th, the market price of N220 carbon black in Shandong Province was 9700 yuan/ton, a decrease of nearly 15% from the price in October.
In November, some carbon black enterprises suspended production for maintenance to alleviate inventory pressure, resulting in a significant decline in operating rates and a significant digestion of inventory in the carbon black industry. In December, as the off-season atmosphere of demand in the terminal tire industry continued to deepen, some carbon black enterprises in Shandong, Shanxi and other regions were restricted in starting production due to environmental factors, and the operating rate of carbon black enterprises was slightly reduced. Domestic carbon black enterprises have started to reduce their load, and currently the operating rate of the carbon black industry has fallen to around 65%. Due to poor circulation of goods, market transaction volume has decreased, and market orders in the later stage are temporarily unclear, leading to the accumulation of finished product inventory on site.
Cost side: The price of raw material coking coal is relatively strong, coupled with the lack of eye-catching products in downstream industries. The main downstream coal tar has poor demand, and only on-demand procurement of coal tar is maintained. The production enthusiasm of the coal tar industry is average, and the market supply is stable at a low level. As of the 26th, the market price of coal tar was 4370 yuan/ton, a decrease of nearly 500 yuan/ton compared to October 1st. The price trend of high-temperature coal tar has declined, and the cost support for carbon black enterprises is poor. The market situation has declined significantly in the fourth quarter.
The downstream tire industry has entered a seasonal off-season, with demand for all steel tires and semi steel tires gradually slowing down. The transportation volume of goods in the northern logistics industry has significantly decreased, and the construction and construction projects in some regions have started to decline. The demand for tire replacement has weakened, resulting in a sharp decrease in demand for tire replacement. Terminal demand is weak, and enterprise inventory continues to slowly increase. The overall operating rate of the tire industry has declined, and some tire companies have carried out equipment maintenance to reduce production load, Manufacturers have poor enthusiasm for purchasing carbon black raw materials, and their entry into the market only maintains a basic demand, resulting in a relatively quiet market trading atmosphere.
2、 How is the carbon black market in 2024?
1. The concept of carbon black
Carbon black is one of the oldest industrial products, which is a black powdery substance formed by incomplete combustion or pyrolysis of hydrocarbons under strictly controlled process conditions. Its main component is elemental carbon, and it contains small amounts of oxygen, hydrogen, and sulfur. Carbon black particles are approximately spherical, with a particle size ranging from 10 to 500 μ Between m. Many particles often melt or aggregate into three-dimensional branched or fibrous aggregates. In rubber processing, it is mixed and added to rubber as a reinforcing agent and filler.
2. Carbon black industry chain
The upstream of carbon black consists of raw materials such as coal tar, anthracene oil, and ethylene tar. Coal tar and anthracene oil are by-products generated from coking, accounting for over 80% of the raw oil. Downstream are application industries such as tires, rubber products, plastics, and batteries.
3. Carbon black downstream market
The main consumption proportions of carbon black in the downstream market are tire carbon black, rubber carbon black, plastic, etc., accounting for 66.7%, 22.2%, and 6.3% respectively.
4. Carbon black production capacity and output
Among the world's carbon black production and supply countries, China ranks first in the world with 46.1% of the supply, and is a major producer of carbon black worldwide. According to data from the China Rubber Industry Association, the total production capacity of China's carbon black market in 2023 was about 9.7655 million tons, an increase of 937500 tons compared to last year, a month on month increase of 10.6%, and a slight increase in overall production capacity. Among them, the carbon black production capacity in East China and North China accounts for the largest proportion, accounting for 36% and 35% of the total carbon black production capacity, respectively. The industry's total production capacity has maintained a steady growth of 3% annually in recent years.
From January to November 2023, China's carbon black production reached 4.9135 million tons, an increase of 9.5% compared to the same period last year, with an increase of approximately 426500 tons.
5. Analysis and prediction of the basic situation of carbon black in 2024
Given the production capacity of domestic carbon black, national policies provide directional guidance for the carbon black industry, mainly focusing on eliminating outdated production capacity, raising entry barriers, optimizing industry structure, and cultivating a group of carbon black enterprises with international competitiveness. At present, the carbon black industry has shifted from a stage of high-speed growth to a stage of high-quality development. With the gradual implementation of policies, the competition in the future carbon black market may continue to intensify, and backward domestic production capacity will gradually withdraw. In recent years, the carbon black production capacity has maintained steady growth every year, indicating that there will be a slight increase in domestic carbon black production capacity in 2024.
Cost side: In 2024, under the implementation of the national policy of dual control of environmental protection and energy consumption, the supply of high-temperature coal tar may continue to be tight, with a large demand gap, which will provide certain positive support for the high-temperature coal tar market. Although the current price of coal tar has fallen slightly, there is still some support for the cost of carbon black. It is expected that the high-temperature coal tar market will first decline and then rise in 2024, with an overall strong operation.
In 2023, the production and sales of automobiles reached a new high, and the domestic economy is operating steadily. It is expected that the production of the tire industry will continue to increase in 2024, and the demand for raw material carbon black is expected to improve. The prices of raw materials continue to rise, and some tire companies have continuously raised their price policies. The tire industry has a certain profit margin, and the market may operate well in the future. It is expected that the tire industry will have a certain amount of hard demand support for carbon black at the end of 2024.
Overall, in 2024, the carbon black industry will shift from a high-speed growth stage to a high-quality development stage, with some support for raw material prices and overall improvement in downstream terminal industries. The competition in the carbon black market may become more intense.
