Data monitored by SunSirs indicates that the market price of carbon black rose sharply last week. By the end of August, the domestic market price for N220 carbon black stood at 9,142.86 RMB/ton, marking a 10.96% increase from the 8,240 RMB/ton recorded at the beginning of the week and a year-on-year rise of 26.46%.

Regarding raw materials, the market for high-temperature coal tar experienced significant volatility in August, characterized by a pattern of "sharp decline, rebound, and subsequent rise." Early in the month, coal tar prices underwent a substantial correction due to weakening trends in deep-processing products and growing resistance from downstream sectors; by August 12, the mainstream transaction price in Shandong had dropped to 4,050 RMB/ton, marking a single-day decrease of 220–320 RMB/ton. Subsequently, as coking enterprises reduced operating rates due to mounting losses, coal tar supplies tightened, causing prices to rebound rapidly. By August 20, the mainstream transaction price in Shandong had climbed to 4,340–4,370 RMB/ton—an increase of 290–320 RMB/ton compared to the previous week. By August 28, the price in the region had risen further to 4,560 RMB/ton. This significant volatility in raw material costs served as the primary driver behind the fluctuations in carbon black prices throughout August. 

On the supply side, the operating rate of the carbon black industry in August initially declined before rising, remaining at a low-to-moderate level overall. The monthly operating rate averaged 66.44%, down 0.90 percentage points from the previous month. Weekly data showed significant fluctuations: the rate dropped to 64.58% in early August, recovered to 65.75% mid-month, and climbed to 67.73% during the week of August 14–20—an increase of 1.98 percentage points week-on-week. Major enterprises conducted staggered maintenance; while a plant in Shanxi resumed operations after completing maintenance, some manufacturers in Shandong remained under maintenance, and the release of new capacity in Guangdong fell short of expectations. Sinochem Quanzhou successfully brought its 80,000-ton/year carbon black project online with dual production lines in late August, injecting new capacity into the market. Leading carbon black enterprises focused primarily on fulfilling existing orders, keeping overall spot inventories low; driven by a market sentiment favoring price increases and robust shipment volumes, inventory levels continued to decline.

Regarding end markets: Overall downstream demand for carbon black was weak in August, as the market was in the traditional off-season for consumption and lacked the stimulus of essential demand. Although tire manufacturers saw a slight rise in capacity utilization, insufficient end-market orders led many companies to maintain production controls, thereby limiting the extent of the increase. Downstream tire manufacturers showed limited willingness to accept high-priced orders, and actual transaction volumes fell short of expectations; market activity was driven primarily by essential demand and pre-existing orders. Despite a rise in operating rates within the downstream tire sector in August, overall support from the demand side remained limited. Furthermore, industries such as masterbatches and rubber products also remained sluggish, with "high price levels and lackluster trading" characterizing the market throughout the month.

Influencing factors: The carbon black market in August was shaped by a combination of factors. On the cost side, coal tar prices initially fell before rising; the easing of cost support early in the month drove carbon black prices down, whereas the sharp rise in raw material costs during the middle and latter parts of the month became the primary driver for price increases. Regarding supply, the industry's operating rate stood at 66.44% in August, down 0.90 percentage points from the previous month; this was due to staggered maintenance at major enterprises and the slower-than-expected ramp-up of new capacity in Guangdong, resulting in low overall spot inventory levels. On the demand side, while tire production rates rebounded, end-market orders remained insufficient, and there was strong resistance to high prices. In terms of price positioning, current carbon black prices sit in the mid-to-high range on a 60-day cycle and at high levels on both 3-month and 1-year cycles, limiting further upside potential.

Market Outlook: The tight supply of the raw material coal tar is unlikely to ease in the short term, and cost support is expected to persist. Low operating rates and low inventory levels on the supply side also provide a floor for prices. On the demand side, as the traditional peak consumption season of "Golden September and Silver October" approaches, operating rates at tire and rubber product manufacturers are expected to rise, likely boosting interest in carbon black inquiries. However, with carbon black prices already at historical highs and limited acceptance from downstream buyers, the scope for further price increases may narrow. The carbon black market is expected to fluctuate at high levels in September, with the overall price trend remaining stable to firm.

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