◎ Si Xianchao
On April 25, four largest listed carbon black companies in China published the report of the first quarter in 2019 on the same day, and the net profit of four enterprises had a sharp fall.
China carbon black listed company performance in Q1th of 2019
Unit: Hundred Million Yuan
| Company | Operating income | Year on year | Net profit attributable to shareholders | Year on year |
| Jiangxi Black Cat Carbon Black Inc., Ltd. | 15.6 | -16.19% | -7424.7 | -155.06% |
| Longxing Chemical Stock Co, Ltd. | 6.91 | 1.53% | 158.6 | -95.03% |
| Shanxi Yongdong Chemical Industry Co.,Ltd. | 6.45 | 7.88% | 2212.3 | -72.51% |
| Shangdong Jinneng Science & Technology Co., Ltd. | 19.98 | 7.11% | 14551.3 | -43.59% |
Seen from the table, among 4 enterprises, the operating revenue of 3 enterprises realized a positive growth within 10%, however, compared with that in the same period of last year, the minimum fall of net profit was 43.59% and the maximum fall reached 155.06%. All the 4 enterprises attributed sharp fall in profit to reduction of gross profit rate in the first quarter. The carbon black price reduction trend starting in the fourth quarter of 2018 has lasted to this March.
From the fourth quarter of last year, affected by the factors such as sharp fall in international crude oil price, slowdown in domestic economic growth and worsening trade friction, the price in raw oil for carbon black had a sharp fluctuation, which resulted in “passive price reduction” of carbon black products and the quarterly operating profit of the enterprises was even reduced to be zero.
According to the data of Jinneng Science & Technology, the sales volume of this company in the first quarter of 2019 greatly increased by 27.54% to be 60,600 tons, however, the sales revenue only increased by 1.30%, which is caused by sharp fall in price of carbon black products. In the first quarter, the average price of the carbon black products of this company was 5,263.34 Yuan, which sharply fell by 20.58% compared with 6,626.89 Yuan in last year, however, the price of raw materials for production in the same period had a slight rise, which directly resulted in fall in its profit of the first quarter.
According to the information, the situation of carbon black industry just got better in 2017, and nearly 600,000 tons of capacity newly increased in the whole industry in 2018, but the downstream demand was far behind, the over capacity conditions were further aggravated. At present, the national carbon black capacity has exceeded 7.50 million tons, but the demand for carbon black is only over 5.50 million tons. Compared with North America, etc., there are many carbon black enterprises in China, thus it is impossible to pass on the cost to the downstream easily.
