◎ Si Xianchao
| Lately, the listed enterprises in carbon black industry successively published their operation conditions in 2018 to the public; except for Jinneng Science and Technology, the listed carbon black companies in China such as Blackcat Carbon Black, Longxing Chemical and Yongdong Chemical published detailed performance information, and International CSRC, the listed company in Taiwan, China, also disclosed its data such as annual operating income. |
Four large-scale listed carbon back companies realized sharp growth in annual operating income in 2018, in which Yongdong Chemical had the largest growth, which had exceeded 30%, and all these enterprises attributed the growth in operating income to sustainable rise in selling prices of the products.
Seen from net profit attributable to shareholders, only the performance of Blackcat Carbon Black declined slightly. However, in fact, Yongdong Chemical realized profit of 229 Million Yuan and profit increase rate of up to 63.16% in the first three quarters, that is, its profitability rate in the fourth quarter slowed down slight; high increase rate of Longxing Chemical occurred on the basis of the profit of 49 Million Yuan in the previous year, and 133 Million Yuan was also lower than the average industrial level.
Carbon Black Industry Encountered “Waterloo” in the Fourth Quarter
China’s carbon black industry entered the prosperity period in 2017, and the good situation continued to September 2018. However, from the fourth quarter, the prices of carbon black products dropped away from those of the manufacturing raw materials, the loss after October brought down the annual profit of the carbon black enterprises, and some enterprises even had loss as a consequence.
China carbon black listed company performance
100 Million Yuan
| Company | Operating income | Year on year | Net profit attributable to shareholders | Year on year |
| Jiangxi Black Cat Carbon Black Inc., Ltd. | 78.93 | 13.61% | 4.02 | -16.31% |
| Longxing Chemical Stock Co., Ltd. | 30.86 | 14.19% | 1.33 | 165.66% |
| Shanxi Yongdong Chemical Industry Co., Ltd. | 25.87 | 30.31% | 2.78 | 17.18% |
| China Synthetic Rubber Corporation | 53.22 | 20.81% | / | / |
From August 2018, the price of coal tar, a major raw material of carbon black, began to rise. With the arrival of the heating season with stricter environmental protection policy, the price of coal tar rapidly rose from 2,800 Yuan (price per ton, the same below) to 4,200 Yuan in the mid-November, with a rise of nearly 50%. However, at this time, the rise in the prices of carbon black products in the market were far behind, and some enterprises already had had loss. By the mid-November, the international crude oil price had dropped dramatically, the supply was greater than the demand in the coal tar market, which resulted in sharp fall in the price of coal tar, the carbon black industry had to lower the price, “buying at a high price and selling at a low price” made most of the enterprises complain incessantly in the fourth quarter.
According to the report of the first three quarters of Blackcat Carbon Black, it can be seen that the performance of this company in the first nine months of 2018 still showed a hot trend, and the net profit attributable to share-holders had reached 439 Million Yuan, which increased by 37.95% compared with that in the same period of last year. In other words, this company had a net loss of 37 Million Yuan in the fourth quarter because of fluctuation of the prices of the raw oil for carbon black.
Several other enterprises also disclosed externally that the fluctuation in the price of the raw materials made it more difficult for the enterprises to make profit in the fourth quarter, and the net profit of the whole year was also affected.
Analysis of Change in Enterprise Performance
Blackcat Carbon Black expressed that in the first three quarters, its carbon black business was in good operation conditions and the profitability level of its products was relatively stable; however, from the fourth quarter, comprehensively affected by the factors such as sharp fluctuation in the prices of the raw oil, slowdown in growth of domestic economy and worsening trade friction, the enterprise had certain degree of operational loss and loss from falling price, and the annual profitability level also declined.
Longxing Chemical attributed the performance growth to sharp growth in gross profit. This company mentioned that along with adjustment of “Environmental Protection Fits All” policy of the government department, the main carbon black enterprises kept a relatively high rate of operation and absolute market share, the enterprise profitability was increased and the operation conditions were good.
Yongdong Chemical pointed out that in the past year, the internal management level of the company was further improved, the prices of the products constantly rose and the profit space was constantly increased; meanwhile, the newly-built project of the company had been put into production in 2018, and the product supply ability was sharply improved.
