Price Trend

According to the data monitored by business associations, the price of domestic carbon black quoted 6,900 yuan/ton on July 31, with a slight fluctuation and a price fluctuation range of 100-300 yuan/ton, the market of carbon black is stable this month, and the low-level operation is the main one.

In 2018, after a sharp fall in the carbon black market, it is difficult for prices to rise again. Prices fluctuated slightly throughout the first half of 2019, rearranged and maintained at 6,000-6,500 yuan/ton, and there was no further sharp rise or fall in the market.

II. Market Analysis

Industry chain: In the first half of 2019, the terminal tire market started to decline compared with last year. In the first half of the year, due to the reduction of terminal car sales, combined with trade and other factors, the tire factory started to decline. Due to the decline in start-up, the demand for carbon black in tire market in the first half of the year decreased by 706,600 tons compared with last year, and the demand decreased considerably, which limited the growth of the whole carbon black market and caused serious losses. In the second half of the year, due to the decrease of downstream demand and the off-season of downstream demand in July and August, the trend of carbon black falling easily and rising difficultly will continue.

Listed company:

On the evening of July 12, Longxing Chemical disclosed its semi-annual performance forecast for 2019. The company estimated that the net profit attributable to shareholders of listed companies from January to June 2019 was between 8 million yuan and 12 million yuan, down 81.02% to 87.35% from the previous year.

Longxing Chemical Main Products Carbon Black, Silica Black, Electricity, Steam and Industrial Naphthalene and other chemical products. As for the reasons for the decline in performance in the first half of 2019, the company said that during the reporting period, due to the dramatic decline in automobile production and sales, the downstream tire market start-up rate was lower than the same period last year, and the demand for carbon black in the tire market was lower. At the same time, with the release of new carbon black production capacity, the price competition in the carbon black industry was further intensified. Competition, raw coal tar market prices run at a high level, the common impact of carbon black gross interest rates significantly decreased year-on-year. The report of the first quarter of 2019 issued by the four major carbon black listed companies in China shows that the net profit of the four companies has declined dramatically, even a huge quarterly loss of more than 74 million yuan.

3. Future Market Forecast

Business Society Chemical Branch carbon black data analysts believe that: due to the downstream demand reduction, coupled with July and August for the downstream demand off-season, the trend of carbon black easy to fall and difficult to rise will continue, short-term has not been significantly positive, the market is expected to continue to operate at a low level.