◎ Xu Yiming 

By sorting out the public data of these four enterprises in recent three years (2015-2017), it is found that the carbon black industry is largely influenced by the uctuation of the price of the upstream coal tar market and downstream market of rubber products such as tire. In 2017, the national environmental protection supervision became severer, some enterprises which are not environmentally friendly are forced to be closed, the market leans to the large enterprises and good enterprises, in addition, with sharp increase of capacity utilization rate and production and sales volume of tire industry, the carbon black market has increased demand, obvious increase in price and generally better performance.

I. Change Conditions of Business Income in Recent Three Years

The change trend of carbon black business income of four listed companies basically keeps consistent. It showed a trend of steady development from 2015 to 2016, and had a large growth in 2017, which was generally above 50%, specially, the carbon black business of Yongdong increased by 84.57%. Seen from specific numerical value, the carbon black business income of Black Cat is RMB 5.765 Billion Yuan, about the sum of the carbon black business income of the other three listed companies.

Fig. 1: Change Trend of Realized Business Income of Four Listed Carbon Black Companies in Recent Three Years 

See Fig. 1 for change trend of realized business income of four listed carbon black companies in recent three years and Table 1 for conditions of carbon black business income.

Table 1: Conditions of Carbon Black Business Income of Four Listed Carbon Black Companies in Recent Three Years 

II. Change Conditions of Net profit

Table 2: Realization Conditions of Net profit Attributable to the Listed Shareholders of Four Listed Carbon Black Companies in Recent Three Years 

See Table 2 for realization conditions of net profit attributable to the listed shareholders of four listed carbon black companies in recent three years and Fig. 2 for change trend of profit growth.

Fig. 2: Change Trend of Profit Growth of Four Listed Carbon Black Companies in Recent Three Years 

In recent three years, the change trend of net profit growth of listed carbon black companies kept consistent on the whole, the growth declined on the whole in 2015 and kept a rapid growth from 2016 to 2017. Among it, the net profit growth of Black Cat was 502.61% in 2016 while that was 410.74% in 2017.

III. Analysis of Output

According to the statistics of China Rubber Industry Association Carbon Black Branch, in 2017, the national output of carbon black was 5.53 million tons, which increased by 6.05% compared with that in the same period of last year. Among it, the output of key carbon black enterprises accounted for up to 71% of the total output. See Table 3 for change trend of carbon black output of listed carbon black companies and Fig. 3 for completion conditions of carbon black output of listed carbon black companies.

Table 3: Change Trend of Carbon Black Output of Listed Carbon Black Companies 

Fig. 3: Completion Conditions of Carbon Black Output of Listed Carbon Black Companies 

In recent three years, the output of listed carbon black companies kept consistent on the whole. The carbon black output of Black Cat was far ahead while the carbon black output of Yongdong kept stable growth. The output of Black Cat and Longxing Chemical uctuated slightly with small change in 2016.

IV. Conditions of R&D Fund Investment of four Enterprises

See Table 4 for conditions of R&D fund investment of listed carbon black companies in 2017.

Table 4: Conditions of R&D Fund Investment of Listed Carbon Black Companies in 2017 

It can be seen from Table 4 that the R&D investment of four companies increases to some extent compared with that in last year, and the proportion of R&D investment in total sales income has little difference. In it, the R&D investment of Yongdong increased by 71.79%, with the fastest growth; the R&D investment of both Black Cat and Jinneng Science & Technology exceeded RMB 200 Million Yuan; and the R&D investment of Longxing Chemical had a stable growth.

V. Analysis of Reason for Rise in Price of Carbon Black

The market price of carbon black is closely linked with the supply and demand situation and price trend of upstream raw material market, the raw materials for production of carbon black are mainly raw oils such as coal tar, which account for about 80% of the production cost. See Fig. 4 for price relevance between carbon black and coal tar.

Fig. 4: Price Relevance between Carbon Black and Coal Tar 

According to relevant information of BAIINFO, in 2017, the price of coal chemical products sharply increased, the demand of coal tar market exceeded the supply and the price surged, with the average price cumulatively rising by RMB 2,116 Yuan/ton compared with that at the beginning of the year and the annual growth reaching 107.47%. In addition, according to the statistics of CCIA, the growth of the price of coal tar in March and June of 2017 was higher than 100%. The yearly average price of coal tar increased by 80% compared with that in the same period of last year while that of anthracene oil increased by 64.72% compared with that in the same period of last year, and the cost of raw materials for production of carbon black almost increased by 80%.

Affected by the price of raw materials, the price of carbon black was almost increased linearly in 2017. According to the information of downstream tire market, the growth of carbon black products was specially obvious in the first and forth quarters, and the average growth was more than 40% throughout the year. Take N330 as the example, the annual average price is RMB 7,600~8,400 Yuan/ ton, the price per ton is increased by RMB 3,063 Yuan cumulatively in the whole year, with a growth reaching up to 59.38%.

VI. Future Development Prediction of Carbon Black Market

1. The market concentration will be further improved

Over the past few years, affected by environmental protection and continued depression of upstream tire industry, the growth of overall capacity of carbon black industry was stagnant. In recent two years, along with recovery of tire demand, the prosperity degree of carbon black industry constantly rose. Normalization of environmental protection supervision and implementation of Technical Specification for Access of Carbon Black Industry published by China Rubber Industry Association raise the bar of access of carbon black industry, accelerate optimization of industrial structure, further increase capacity concentration and improve the profitability of the industry.

In 2005, China replaced America to become the largest carbon black producing country in the world. From 2009 to 2014, the annual average growth rate of China’s carbon black output reached 13%. In 2015, the output of carbon black declined, the capacity utilization rate fell to the bottom to be about 70% and the industry entered the surplus status.

For a long time, small and micro businesses and workshop-style production enterprises enter the carbon black market with low price, thus causing unfair competition in the market. The product structure dominant by the products with middle and low end and low gross margin severely affects the development of domestic carbon black industry. Under the tough stance of national supply side reform and environmental protection supervision, small and micro businesses and workshop-style production enterprises in carbon black industry are squeezed in two aspects, market and policy, some will be eliminated, thus the unfair competition of low-price and low-end products is reduced and large-scale carbon black production enterprises will obtain larger development space, which helps improve the competitive position of China’s carbon black products in the world.

2. The industrial transformation and upgrading speeds up

China’s carbon black industry still has many shortages in aspects of technical innovation, optimization of industrial structure and brand construction. For a long time to come, China’s carbon black industry will enlarge scientific research input, carry out research in aspects such as carbon black production theory, application, development of new products and advanced equipment, take the market as the orientation and accelerate development of low hysteresis carbon black, special carbon black and new varieties of carbon black as well as their compound materials required by green tire to adapt to the constantly changing market demand and improve the overall competitiveness of domestic carbon black industry. 

Since the carbon black industry mostly chooses the place close to the origin of raw materials for industrial layout, the capacity is mostly in the northern energy and chemical provinces. Over the past one year, affected by the national and regional environmental protection policy, partial carbon black enterprises in provinces such as Hebei, Shandong, Shanxi and Shaanxi were closed down and limited in production, which caused a large influence on carbon black industry. Along with constant development of carbon black industry in recent years, the demand for raw oils also rises, and the situation of resource shortage can not be changed. Therefore, seeking for new resource channels and profit growth points are also directions the carbon black industry constantly strives to seek for breakthrough at present. Under the current conditions of tension supply and price rise of raw materials of carbon black, realizing scientific and reasonable utilization of resources and energies is of more important practical signi cance.

Comprehensive utilization of resources and environmental protection will become the prerequisites and inexhaustible impetuses for carbon black enterprises to carry out production and operation in new period.