US Carbon Black Prices Rise in August Amidst Rising Disruptions and Uncertainty

Carbon Black N220 grade prices have surged cumulatively by 5% till the latest round of assessment in August 2024.  The first week saw a surge in Carbon Black prices which were primarily due to higher trading observed across the regions of Texas as more petrochemical units come online after severe outages due to Hurricane beryl, Canadian Strikes and higher consumer spending due to summer spending.

Latest round of analysis on Carbon Black revealed that the import prices increased for US bound deliveries, largely through Canada. Promising US OEM sales were observed in late July and early August due to seasonal consumer offers. Meanwhile, Carbon Black supply remained moderate for Carbon Black N220 grade. The domestic operating capacities in July fell, while recovered in August. While deliveries from Canada inflated the prices, deliveries from APAC on the western coast fell further this week as freight charges eased. Downstream Carbon Black markets, the U.S. automobile market saw new vehicle sales hit around 1.34 million units, marking a modest 2.8% year-over-year increase. The labor market's weaker performance also contributed to cautious spending in previous months. However, signs of spending have been improving in August.  Carbon Black demand surged this week, as the momentum in consumer spending improved on the back of easing inflation and falling mortgage rates.

The second week saw expensive supply of Carbon Black from Canada as well as from the Indian markets. As freights have remained elevated, the supply from overseas has been largely lagging the month behind the spot prices. Domestic production remained stable while Canada’s domestic production has been falling due to labor strikes uncertainty and domestic traders stocking up for strategically to raise the prices. Market intelligence suggests that prices have been easing in US markets as more traders are extending discounts this week to their customers currently as demand slowing down and purchasing activities easing amidst lower WTI index observed. 

The third week continued its bullish rally in Carbon Black N220 grade. The persistently high freight rates have caused overseas supply to trail behind spot prices by approximately a month. While domestic production in the U.S. remained stable, Canada’s output has declined due to uncertainties surrounding labor strikes, leading domestic traders to stockpile strategically in an effort to drive up prices.

Carbon Black N220 grade prices have been forecasted to remain bullish in September as pre-fall trading as well as stocking across APAC-North Americas resume. As winter stocking on the shelf, domestic production facing challenges due to Canadian railroads negotiations, inbound deliveries from India and other regions to keep prices stable in the longer term, while September deliveries are expected to keep the Carbon Black prices up.