European Carbon Black prices dropped to the lowest in three months as September reaches conclusion. FD Rotterdam Carbon Black N220 grade prices dropped to USD 1440/MT after hitting as high as USD 1570/MT previous month, latest assessment of ChemAnalyst revealed. The price drop in Europe was also supported by falling freight charges from NE Asia to Europe amidst slowing demand and more companies of NE Asia going offline due to Autumn celebrations and festivities. While NE Asian Carbon Black markets have remained bearish since Q2, the South Asian Carbon Black market turned bearish in Q3 due to slowing demand and rising capacities. More Russian capacities have been diverted towards NE Asia and SE Asian markets forcing traditional Indian Carbon Black suppliers to reduce their prices, reflected in the latest round of quotations.

In European markets, price surge remained major characteristics for Q2 trade, ended in June. The contract prices touched as high as USD 1570/MT due to Russian sanctions and transshipment of goods via Poland and Hungary. Latest data revealed that FOB Calcutta bound deliveries of N220 grade to Rotterdam surged 300% in July. The surge reflects the changing dynamics in European supply chain for Carbon Black N220 grade. Market participant belonging to European distribution network revealed that high stocks have been maintained of Carbon Black to cater any surge in demand. The player alluded that Indian supply from July have been relatively competitive to other suppliers as price fall of USD 50/MT in the month of September 2024 was observed. The price fall for European quotations since August further led to higher mix of Indian Carbon Black supply into European markets, driven largely by increased winter tire production in Europe. Hubtrac, a major tire producer in Europe further raised investment for European market. This investment opportunity comes in line with higher capacity expansions of Carbon Black N220 grade occurring in India. Recent announcements of Tire producer Balakrishna industries commissioning Carbon Black plant in India attests to increasing Indo-European supply ties. The mentioned Carbon Black plant reported that 30,000 tons of Carbon Black production annually, bringing company’s total Carbon Black capacity up to 200,000 tons.

On the other hand, India’s Carbon Black market has been facing bearishness in the late September aided largely by lower consumption by tire industry as companies undertake cautious view amidst slowing automobile demand. This bearishness also stems from lower crude prices since the beginning of August, with Residual fuel discounts to Crude oil widening due to lower spot crude prices. India’s Carbon Black N220 grade Ex-Durgapur fell by USD 20/MT in the latest assessment as Indian market currently has been assessed to be overstocked. Similarly, NE Asia’s Carbon Black market has been seeing lower demand and prices due to EV slowdown globally.

ChemAnalyst revises it forecast for October from bullish to bearish for October deliveries as heavy bearishness in Indian as well as NE Asian markets to drive down global Carbon Black prices. However, active trading season and rate cuts in European markets to turn the price movement of Carbon Black bullish by the end of October, bringing prices to previous level.