Recently, domestic carbon black prices have skyrocketed, with a 50% increase in the past month. As of September 15th, the market price of N220 carbon black in China was at 12778.57 yuan/ton, a month on month increase of 50.59% and a year-on-year increase of 73.62%, setting a new historical high.
The recent significant increase in carbon black prices is the result of rigid transmission of upstream coal industry chain costs and multiple supply side contractions. Essentially, it is a “cost driven, supply side contraction” price adjustment, rather than downstream demand overheating or speculative speculation.
Cost side: Coal tar prices skyrocket, forming rigid cost drivers
Coal tar accounts for 65% -80% of the production cost of carbon black, and its price jump directly drives up the production cost of carbon black.
The root cause of the surge in coal tar is the contraction of coking coal supply. Since the beginning of this year, coal mines in the main production areas have been affected by safety production inspections, environmental supervision, and other factors, resulting in slower than expected resumption of production. The shortage of high-quality coking clean coal supply has become prominent, and the cumulative increase in coking coal prices this year is about 77%. The price increase of coking coal has pushed up the costs of coking enterprises, causing them to generally suffer losses and being forced to lower their operating rates. As a by-product of coking, coal tar production has passively declined, and some coking enterprises have even reduced their exports and turned to self use, further tightening the market circulation of goods.
In September, the export of coal tar improved and profits increased, and the deep processing industry maintained high production, forming a rigid procurement demand for coal tar. Coupled with the concentrated stocking before the Mid Autumn Festival and National Day holidays, the supply-demand contradiction sharply intensified. The price of high-temperature coal tar has risen by as much as 2200-2270 yuan/ton in just two weeks, setting a historical record of nearly 2000 yuan/ton per week.
Supply side: Carbon black companies reduce production and inventory levels, amplifying price elasticity
Carbon black enterprises themselves are also facing serious operational pressure, with multiple supply side contractions: the industry is experiencing long-term losses, and there is a strong willingness to raise prices. The carbon black industry suffered long-term losses in the fourth quarter of 2025, with a total profit of -115 million yuan in the first half of 2026, and the overall loss situation of the industry continued. After a significant increase in raw material prices, enterprises have fallen into an extreme dilemma of “executing low-priced orders in the early stage and bearing high raw material costs in the current period”, with single ton losses reaching a historical high and forced to concentrate on reducing production to cope.
The operating rate remains at a medium low level, and the spot inventory is low. Affected by multiple factors such as previous losses, equipment maintenance, and environmental control, the operating rate of the domestic carbon black industry has only remained around 65%. Mainstream large factories have basically reduced production by 30-40%, while some small and medium-sized factories have directly stopped production due to weak pressure resistance. The overall spot inventory in the industry is not high, and manufacturers tend to produce according to orders. The market circulation of goods is scarce, and the reluctance of enterprises to sell has increased.
Environmental policies are also accelerating the clearance of outdated production capacity in the medium to long term. In April 2026, seven departments jointly issued a document clarifying that the carbon black industry will be included in the scope of upgrading and renovating old facilities, and a number of small and medium-sized production capacities that do not meet environmental standards will face closure or production restrictions.
Demand side: Tires require immediate support, but have limited willingness to chase after price increases
Tires are the largest downstream of carbon black, accounting for over 60% of the total domestic carbon black consumption. The current operating rate of all steel and semi steel tires remains around 65%. Under the expectation of the traditional “Golden September” peak season, tire factories have a demand for pre holiday stocking, which forms a certain rigid demand support for carbon black.
However, in the face of the rapid rise in carbon black prices, tire companies have shown obvious resistance and insist on purchasing on demand and following up with long-term agreements. Their willingness to actively hoard large quantities is not strong, and the market presents the characteristics of “price increases and weak transactions”. This means that the demand side has limited ability to bear prices, and the space for sustained and significant price increases is constrained.
Global background: Geopolitical conflicts drive up the cost of oil-based raw materials
The overseas carbon black production capacity is mainly based on FCC oil (a byproduct of petroleum refining) as raw material, and the price is highly correlated with crude oil. The geopolitical conflicts such as the US Israel Iran conflict in 2026 have pushed up the international oil price center, causing Brent oil prices to rise from around $72/barrel before the conflict to over $108/barrel. The cost of oil-based raw materials for overseas carbon black companies has significantly increased, and global carbon black prices have risen synchronously, providing price support for domestic carbon black exports.
comprehensive judgment
The transmission chain of this round of carbon black price increase is clear: coking coal supply contraction → coking losses and reduced production → passive reduction of coal tar and concentrated release of demand → skyrocketing coal tar prices → rigid increase in carbon black costs → carbon black enterprises reducing losses and increasing prices. Carbon black enterprises and downstream tire enterprises are actually both under pressure from this round of cost fluctuations, and the profits of the industrial chain are being squeezed by the costs of upstream coal. The key to the subsequent trend lies in whether the tight supply of coal tar can be alleviated, as well as the actual capacity of downstream tires to accept high priced raw materials.
| http://www.sulfamic-acid.com |