Carbon Black

Carbon Black Recent Commodity Market Intelligence Report

I. Price Trends
- Benchmark Price Fluctuations: According to Shengyisi data, the carbon black benchmark price on July 6, 2026, stood at RMB 8,580.00 per metric ton, representing a 3.62% increase from RMB 8,280.00 per metric ton on July 1, 2026; the benchmark price on July 3, 2026, remained unchanged at RMB 8,280.00 per metric ton compared to July 1, but rose by 5.61% from RMB 7,840.00 per metric ton on June 1, 2026.
- Regional Price Disparities: Prices vary significantly across regions. For instance, in Shandong Province—where demand from tire manufacturers is highly concentrated—buyers possess relatively strong bargaining power, and price fluctuations are notably influenced by regional supply-demand dynamics.
- Precipitated Silica (White Carbon Black) Price: Per mobile Jintouwang data, the price of premium-grade rubber-grade precipitated silica was RMB 5,933.33 per metric ton on July 6, 2026, unchanged from early July.

II. Supply-Demand Landscape
- Supply Side:
- Concentrated Capacity Expansion: 2026 marks a year of concentrated new capacity rollout for carbon black, with over 800,000 metric tons of new capacity expected—primarily contributed by large-scale enterprises and petroleum-based raw material producers (e.g., Changhong Bio, Sinochem Quanzhou), further elevating industry concentration.
- Inventory Pressure: Social inventory remained at historically high levels at the end of 2025; abundant supply persisted into early 2026, dampening both the timing and magnitude of price increases.
- Demand Side:
- Domestic Consumption: Domestic consumption growth in 2025 was modest; while demand for all-steel tires increased, demand in semi-steel tires and other rubber product segments declined, limiting its effectiveness in absorbing existing inventory.
- Export Support: In 2025, export volume surged by 22.52% year-on-year, with export gross margins exceeding those of domestic sales, helping absorb some production capacity—though demand may ease slightly in 2026.

III. Cost and Profitability
- Raw Material Prices: Fluctuations in feedstock prices—such as fuel oil—directly impact carbon black production costs. For example, the fuel oil benchmark price stood at RMB 6,050.00 per metric ton on July 6, 2026, with the price differential narrowing negatively, thereby easing cost pressure.
- Industry Profitability: In 2025, the industry’s operating rate fell below 70%, pushing the sector into marginal profitability or even losses across the board; intensifying supply-demand imbalances in 2026 could further compress profit margins.

IV. Industry Developments
- Capacity Expansion and Phase-Out: Over the next five years, substantial capacity expansion is anticipated; however, obsolete capacity elimination is accelerating, placing mounting pressure on small- and medium-sized enterprises (SMEs).
- Import Dependence on High-End Products: High-performance products such as conductive carbon black remain largely import-dependent, though domestic substitution is gaining momentum. Huatai Securities estimates the global market size for conductive carbon black will reach approximately RMB 7.6 billion by 2027.
- Environmental and Performance Upgrades: Growing performance requirements from sectors such as metallurgy are driving demand for low-impurity, high-purity carbon black products.

Analysis and Assessment

I. Short-Term Price Outlook
- Short-Term Upside Drivers: The slight price uptick observed in early July 2026 stems mainly from feedstock cost volatility and regional supply-demand adjustments; however, elevated social inventories constrain upside potential.
- Regional Divergence: Prices in major consumption hubs—such as Shandong—may outperform non-core regions due to stronger purchasing power from tire manufacturers.

II. Medium-Term Supply-Demand Imbalance
- Oversupply: Concentrated new capacity commissioning in 2026, coupled with persistently high social inventories, sustains significant oversupply pressure.
- Weak Demand: Domestic consumption growth remains lackluster; although exports provide support, they are insufficient to fully absorb excess capacity.

III. Long-Term Industry Trends
- Rising Concentration: Large enterprises and petroleum-based producers are expanding market share through economies of scale and cost advantages, accelerating the exit of SMEs.
- High-End Transformation: Domestic substitution for high-end products—including conductive carbon black—is accelerating; technological capability has become a critical competitive differentiator.
- Environmental Compliance Pressure: Stricter environmental regulations are driving green transformation across the industry, sustaining robust demand for low-impurity, high-purity products.

Forecast

I. Price Forecast
- Short-Term: Carbon black prices in July 2026 are likely to trade sideways, with limited upside due to inventory overhang; the benchmark price may fluctuate within the RMB 8,200–8,600 per metric ton range.
- Medium-Term: Prices face downward pressure in the second half of 2026; absent meaningful demand improvement, benchmark prices could decline below RMB 8,000 per metric ton.
- Long-Term: Prices may trend lower during the peak capacity release period of 2027–2028, though improved industry concentration is expected to narrow future price volatility.

II. Supply-Demand Forecast
- Supply: Output is expected to rise in 2026 alongside new capacity ramp-ups; however, operating rates may remain subdued due to persistent margin pressure.
- Demand: Domestic consumption growth remains sluggish; exports continue to serve as the primary engine of demand growth, albeit with potentially moderating momentum.
- Inventory: High social inventory levels are projected to persist, extending the de-stocking cycle and constraining upward price movement.

III. Industry Risks and Opportunities
- Risks: Capacity overcapacity, weak demand, raw material price volatility, and tightening environmental regulatory enforcement.
- Opportunities: Accelerated domestic substitution of high-end products, rising industry concentration, and technology-driven upgrades spurred by green transformation.