There Is No Turning Back for China Carbon Black Prices in May 2022

Shanghai, China: Due to robust cost support and firm demand fundamentals from downstream industries, the Black carbon market has continued its uptrend journey into May 2022. Carbon Black prices haven’t observed any momentum change since the prices turned bullish in early February this year.

As of the week ending 6th May 2022, Carbon Black prices were assessed at USD 1495 per MT on a FOB basis. Carbon Black prices have observed significant and consistent gains in the last few months, and buyers have been left aghast with the persistent bullish rally of Carbon black in the domestic Chinese market.

Raw material Coal tar prices have been high in the Chinese market owing to healthy downstream demand dynamics, which augured well for firm cost support for Carbon Black. As per several market participants, the auction price of new orders of Coal tar has been continuously gaining, which left limited space for Carbon Black manufacturers to manoeuvre market sentiment without increasing the prices.

The landscape of the European Carbon Black market has gone a drastic change. European nations have outgrown their reliance and broke with the past dependency on the Russian Carbon Black imports. Now. Europe looks for a substitute for the gaping hole left by the curtailment of the Russian Carbon black. Hence, Asian producers and US producers have sent ample material to the European shores to fill up the demand. However, a covid resurgence in China has further hampered the global supply chains after the Eastern European conflict between Ukraine and Russia. Meanwhile, freight charges on European routes from the US or Asia have been robust despite a substantial decline in the last few weeks. As of the first week of May 2022, German Carbon Black prices were assessed at USD 1680 on FD basis.

ChemAnalyst states that “Carbon Black prices are expected to remain bullish in the coming weeks due to firm cost pressure and healthy demand dynamics from the downstream tire industry. Both Original Equipment tire and Replacement tire consumption have been firm despite severe restrictions in some cities of China.”