In 2016, the key words of China's carbon black industry are: abnormal fluctuations in the price of feedstock oil, lower price rise of carbon black products than raw materials, industrial overcapacity, increased competition pressure and grave environmental protection situation. Affected by raw material price reduction and downstream market, the price increase in carbon black might stall this year and hit stagnation.
The author analyzed the data of carbon black market in 2016 and examined its operation.
From the perspective of market, in 2016, the price of carbon black feedstock oil fluctuates unconventionally, from the beginning of CNY1,400/MT (the same below) to CNY3,400 at the beginning of this year, with an increase of 140%. Compared to raw material prices, the price of carbon black rose far less than that of raw materials. Taking N330 as an example, the price rose from CNY3,200/MT at the beginning of last year to CNY6,400 this year, increasing by 100%.
From the statistical data by China Rubber Industry Association carbon black branch, the output of carbon black in 37 member companies in 2016 reached 4.13 million tons, rising by 5.03% compared with the previous year, but the income from main business fell by 1.63%, indicating that the product price is still lower than that in 2015.
Through product structure adjustment, many carbon black enterprises targeted the high-grade carbon black products as the dominant direction in 2016 and improved product profitability. Statistics from carbon black branch show that the industry profits in 2016 has increased and the ended of the loss of 2015 with a significant increase in the total profit, but the sales profit margin is only 1.65%, and there are still nine companies in deficit.
According to the export data of General Administration of Customs, China's carbon black exported 730,000 tons in 2010, close to last year; the export delivery value is 500 million Chinese Yuan, down 16.26%, indicating that carbon black export prices are still low.
According to the industry Merger and Acquisition, overcapacity and increased competitive pressure have forced enterprises to find a way out. Listed company Longxing Chemical Co., Ltd. Encountered significant alteration of equities; Golden Eagle Asset Management acquired 7262.94 million shares of Longxing Chemicals, becoming the company's second largest shareholder. Orion Engineering Carbon Company completed the acquisition of Qingdao Degussa Company, so that Degussa was changed from a joint venture to a sole proprietorship. South Korea OCI Group entered into China's carbon black market; Shandong OCI Chemical Co., Ltd. was established two production lines, which produce 40,000 tons of carbon black annually, and put them into operation, thus there is another foreign carbon black enterprise in China.
From environmental protection and energy conservation, environmental protection has always been a “sword” hanging in head of the carbon black business, which means carbon black industries face serious environmental problems and the future environmental regulations will become stricter. Desulfurization and de-nitrification is a necessary supporting project for carbon black enterprises. And now, in view of low profits of carbon black enterprises, they need to invest as much as tens of millions Chinese Yuan in this. Even worse, adding in fixed assets investment plus operating costs, the cost of carbon black enterprises will be greatly increased. However, because of lack of financial support, some small enterprises cannot afford desulfurization and de-nitrification devices and withdraw from market competition, thus leaving a market space for bigger enterprises.
The author believes that in 2017 carbon black industry will still face a rough rise in 2017.
In January, raw material prices climbed remarkably, and carbon black industry began a new round of price adjustment, rising up to CNY1,000/MT, but it still far behind the growth in feedstock oil. In February, carbon black market stuck in short supply. Subject to smog weather, national Environmental Protection Inspection team superintended Beijing, Tianjin, Hebei, Shandong, Shanxi and other places, affecting 2.03 million tons of production volume with less than 50 percent operating rate and limiting production of carbon black for one month, especially in Shanxi and Hebei provinces. Above is the reason for the short supply. The operating rate of whole carbon black industry remained only about 55%, the market supply reduced and carbon black price thus marked up. But did not last long, carbon black business might end the hard-won good days in March because tire companies have large carbon black stock, consumers are not willing to accept rising price in March and the price of feedstock oil shows a downward trend.
In order to accelerate the optimization and upgrading of the industrial structure of the carbon black industry, promote the scientific planning, rational distribution, safe production, protect the environment, reduce energy consumption and reduce the waste of resources and realize the sustainable development of the carbon black industry, China Rubber Industry Association officially released "Carbon Black Industry Access Technical Specifications" in 2016, which provides an effective evidence for the industry's production safety, environmental protection, project supervision and acceptance.
For above purpose, the carbon industry hopes to make use of the "hand of green", "hand of technical specifications" to create a healthy market environment and achieve all-win harmony.
