Carbon Black Prices Fall Further in Europe While Holding Strong In US

Texas (USA): Carbon Black prices continue their bearish trend in Europe amid weakening demand for the eighth consecutive month, despite marginal gains in November. North American markets, on the other hand, remain strong and stable amidst poor global sentiments, despite negative cost pressures during the given timeframe. Comparatively, prices remained relatively higher than those observed during the pandemic shutdowns. American markets are showing strong recoveries in early December amidst falling feedstock prices and demand recovery.

In European markets, Carbon Black was traded around $850/mt, with quotations showing a 2% drop in weekly prices cumulative for December, around 5%, and a year-to-date drop of 40%. Carbon Black markets are generally import-dependent in Europe, with newer capacities being added and set to come onstream from mid-2024 as a full ban on Carbon Black and elastomeric imports from Russia comes into effect. The November Carbon Black market remained stable with incremental demand offset by oversupply as Russia continued to export large volumes through 'shadow tankers,' transshipments, etc. A further analysis of the market dynamics of Carbon Black in Europe revealed that the downstream tire markets remained subdued, especially the replacement market, as transportation and energy costs continue to stay inflated, as revealed by Cefic. Presently, Northern Europe, especially Rotterdam, Hamburg, and Antwerp ports, is observing adverse weather conditions with supply chain disruptions due to river transportation currently being subdued, leading to the major procurement of Carbon Black being postponed, especially from the UAE, as revealed by a market participant.

In North American markets, prices remained strong amidst falling global prices, attributed to strong market purchases and an uptick in consumer demand and business confidence as inflation cooled off significantly. The US Fed has announced a three-rate cuts program in FY24 as core inflation has cooled off significantly in the economy, primarily due to the consistent destocking of feedstock chemicals and the Inflations Reductions Act 2022. US Carbon Black markets are observing improved demand sentiments from the battery market in December. The tire market is currently weakening, offsetting October gains. In American markets, Carbon Black was traded around $2150/mt, with prices having recovered to pre-COVID levels while the market volume remained lower than pre-COVID levels. Challenges pertaining to lower expenditure in the retail market over goods still persist.

ChemAnalyst's forecast of the weakening of Carbon Black prices in Europe remains unchanged for December as we observe falling market demand in Europe, with procurement activities slowing down due to lower labor supply triggered by festivities. Demand is anticipated to return in the US as stable procurement and stable orders are being observed, largely due to US markets anticipating rate cuts in the early months.