Currently, the landscape of the international carbon black market is undergoing profound adjustments. The contraction of overseas production capacity is occurring alongside the rise of trade barriers, and the global center of supply and demand is shifting toward Asia. Consequently, China's carbon black exports face dual pressures: restricted access to high-end markets and fierce competition within the mid-to-low-end segments. The domestic market is under parallel pressure; overcapacity is compounded by sluggish demand, raw material coal tar prices have softened, and carbon black prices continue to fluctuate at low levels, placing significant strain on industry profitability.

I. Export Data: Volume Up, Prices Stable in Q1; Divergent Overseas Demand

According to customs data, export volumes across the carbon black industry chain saw a slight year-on-year increase during the period from January to March 2026. In the first quarter, cumulative carbon black exports reached 321,000 tons—an 8.3% year-on-year increase. During the same period last year, exports totaled 296,000 tons, with an average export price of approximately US$820 per ton. In March alone, exports reached 118,000 tons—a 12.5% ​​year-on-year increase—with the primary export destinations being Southeast Asia and the Middle East, accounting for over 60% of the total volume. Conversely, exports to European and North American markets declined by 15% year-on-year due to the impact of trade barriers, resulting in restricted access for high-end carbon black products. Overall, exports have served as a supplementary channel for reducing domestic carbon black inventories; however, overseas demand remains divergent, and the momentum for future growth appears limited.

II. Recent Production Capacity: Overall Overcapacity; Operating Rates Remain Low

China's total carbon black production capacity stands at approximately 8.5 million tons per year, accounting for about 45% of the global total; consequently, a state of structural overcapacity has persisted for an extended period. In 2026, no new production capacity has come online; instead, obsolete capacity is being gradually phased out, leading to an optimization of the industry's capacity structure. In May, the industry-wide operating rate stood at approximately 68%—a 3-percentage-point decline from April. Small-to-medium-sized manufacturers increasingly cut production due to financial losses, while large-scale manufacturers continued to operate at reduced loads. On the international front, high-cost overseas production facilities continue to shut down, leading to a contraction in global supply; however, as China's share of global capacity increases, the competitive pressure on exports is intensifying.

III. Price Trends: Sustained Downward Pressure at Low Levels; Increased Volatility

Throughout 2026, carbon black prices have followed a trajectory characterized by "initial stability followed by decline, and subsequent fluctuation at low levels." During the first quarter, prices remained stable within the range of 7,500–7,800 RMB/ton. However, after April, prices experienced a continuous downward trend, driven by declining raw material costs and sluggish demand. As of May 13, the prevailing market price for N330 carbon black stood at 7,100–7,300 RMB/ton—a decrease of 600 RMB/ton (or 7.8%) compared to early April. The primary drivers behind these price fluctuations were a reduction in the cost of the raw material (coal tar), weak downstream demand, and persistent overcapacity; market transactions were largely limited to meeting immediate, essential needs, and traders demonstrated an increased willingness to cut margins in order to move inventory.

IV. Upstream and Downstream Pricing: Weakening Coal Tar; Firm Support from Sulfuric Acid

Upstream, the price of high-temperature coal tar—a key raw material—continued its downward trajectory. As of May 13, the prevailing transaction price ranged from 3,300 to 3,400 RMB/ton, marking a 5% decline within the month and thereby alleviating cost-side pressures. Conversely, the price of sulfuric acid—an auxiliary material in carbon black production—remained firm at elevated levels. On May 13, the benchmark price for sulfuric acid (as tracked by SunSirs) stood at 1,862.50 RMB/ton—an increase of over 120% year-to-date—which resulted in a slight uptick in production costs. Downstream, the tire industry is experiencing sluggish demand, characterized by high finished-product inventories and low operating rates; consequently, carbon black procurement within this sector is currently limited to meeting immediate, "on-demand" requirements. Meanwhile, demand for non-tire rubber products remains stable, serving to partially offset the demand shortfall in the tire sector. Prices for carbon black products have trended downward in tandem with raw material costs, leading to compressed processing margins and a narrowing of profit margins for manufacturers.

V. Future Outlook: Predominantly Weak and Volatile; Awaiting Demand Recovery

Looking ahead, the carbon black market is expected to maintain a pattern of weak and volatile performance through May and June 2026. On the supply side, overcapacity persists, operating rates remain at low levels, and supply-side pressure shows no signs of abating. On the demand side, the tire industry is currently in its off-season, resulting in sluggish demand; furthermore, export growth has slowed, and high inventory levels continue to suppress any potential market rebound. On the cost side, coal tar prices are likely to remain weak, while sulfuric acid prices are expected to remain firm at high levels, resulting in relatively weak overall cost-side support for carbon black prices. Overall, in the short term, carbon black prices are expected to range between 7,000 and 7,400 RMB per ton, characterized primarily by weak fluctuations. In the medium to long term—driven by stabilizing overseas demand and the onset of the peak season for the domestic tire industry—prices are poised to stabilize and recover; however, a substantial upward trend will still require a material improvement in demand.

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