In an interesting turn of events, Carbon Black prices have shown the receding trend in China in the latest assessment done by ChemAnalyst. Cost pressure from upstream coal tar has eased in the last few weeks and translated into weak pressure on downstream Carbon Black. Carbon Black prices have remained on the uptrend since the beginning of the year.

As of the week ending 17th June 2022, Carbon Black prices were assessed at USD 1540 per MT on FOB basis and have declined by more than 3% on weekly basis.

The change in momentum of Carbon Black prices in China not only brings relief to the domestic market but also eases the pressure in the international market as China forms a key exporter of Carbon Black worldwide. China caters to the demand of neighbouring Northeast Asia and some key European nations.

Meanwhile, Carbon black demand has also slowed down in the Chinese market owing to limited transportation and other activities due to hefty restrictions in the South Asian nation. Producers have been speculative about these market trends and have declined the production rates in order to prevent an oversupply of the material in the market.

Additionally, Chinese authorities have started the process of lifting restrictions in the critical cities of China however, another outbreak of cases in Shanghai and Beijing has thrown speculations in the process of easing the ongoing restrictions.

Earlier, Carbon black rose consistently for several months on the back of stable demand fundamentals and strong cost-side support for the material. The surge in Carbon black prices started in late Q4, and since then, prices just continued to trend upwards.

As per ChemAnalyst, “Carbon Black prices are expected to remain subdued in the short term. The market sentiment change will likely remain persistent in the coming weeks. International markets are also expected to witness the same pattern where China forms the major source of Carbon Black supply.”