Operation of Carbon Black Industry Facing Severe Winter
Date：2015/03/18 Author: - From: 中国橡胶网
“The carbon black industry gradually entered the severe winter in 2012, and the situation was even worse in 2013, since the output only increased by 8.8%, reaching the historically lowest level with regard to growth rate; and the profit rate of sales revenue dropped to 0.16% from 1.7% in 2012 with the decrease exceeding 90%. Due to the sharp decrease in profit rate, it is hard for many enterprises to survive.” Liu Jiangshan, the council president of CRIA Carbon Black Branch and the president of Longxing Chemical Stock Co., Ltd. grumbled in the 5th session of the 8th executive member meeting and presidium meeting frankly.
As introduced by Liu Jiangshan, the output of carbon black in China kept the annual average growth of 21.9% from 2002 to 2007. After a short recovery from the global financial crisis, the industry stayed in the fast development stage with annual growth of 10% for nearly 3 years, driven by the investment of RMB 4,000 billion yuan and the insurance of stimulus projects in auto industry in 2009. “However, in 2012 to 2013, the situation of the industry went wrong and the scale of losses kept expanding.” Liu Jiangshan said.
It is understood that there are only 2 listed enterprises in the current carbon black industry, which are also the top 2 carbon black enterprises regarding the production capacity at home, namely Blackcat Carbon Black Co., Ltd. and Longxing Chemical Stock Co., Ltd. In the disclosed annual report of 2013 in public, the net profit with non-recurring profit and loss reduction of these two enterprises both decreased by over 85% on a year-on-year basis.
“According to the statistics by the Branch in the first half of this year, enterprises produced 1.88 million tons of carbon black, which increased by 9.20% compared with that in the corresponding period of last year; however, the gross profit decreased by 6.54% on a year-on-year basis; the profit rate of the average sales revenue was only 0.75% in the industry, and 34% of the carbon black enterprises suffered from losses. The average sales cost was RMB 5,691 yuan/ton in the industry, but the average sales price was only RMB 5,715 yuan/ton, and the gross margin of carbon black was only RMB 24 yuan per ton. In addition, it is difficult to maintain the current situation. If this situation goes on, I am afraid the whole industry is difficult to survive. ” Liu Jiangshan analyzed the data in the first half of this year.
As Liu Jiangshan introduced, the cause of this situation in the industry was very complex at present. All the time, the raw oil in the upstream of the whole carbon black industry is in short supply. Payment must be made firstly, while oil supply is placed in the second place. However, the downstream users require delivery first and payment second for carbon black products. Under normal circumstances, payment is made after 3 months, and the capital pressure makes the whole industry in trouble. In addition, the state conducts regulation and control over the overcapacity industries such as steel and coke, which intensifies the raw oil supply of carbon black and makes the price operating at a high level. Meanwhile, tire enterprises lay increasingly high requirements on carbon black variety and quality stability, and several tire enterprises even ask customized services of carbon black products. As a result, carbon black enterprises have to increase the purchase and use of high-end raw oils such as anthracene oil. “The price of anthracene oil was about RMB 300 yuan and RMB 400 yuan to the greatest extent previously, but the recent price is high to over RMB 600 yuan and even exceeds RMB 700 yuan, further increasing the raw material cost during the production of carbon black.”
Furthermore, several provinces have regulated the price of natural gas since September 1 again, and the growth was high to 13% approximately. For carbon black enterprises with natural gas as fuel, the production cost rises again, which is another heavy beat.
Previously, the carbon black industry had made remarkable achievements in energy conservation, emission reduction and resource utilization. However, with the gradual emphasis on environmental protection of the state, the requirements of atmospheric control become stricter. Devulcanization was the minimum requirement before, but now, enterprises are required to complete the matching devulcanization and denitration devices by the end of 2014 and achieve the goal in the whole industry by 2015. In this way, enterprises are not only subjected to the vast one-time input in fixed assets, but also need to bear the expensive device operating expenses, which increase the cost pressure of enterprises to a great extent.
“The tiny profit of the carbon black industry results in the industry’s struggle. The industry can’t maintain simple reproduction, let alone technical research and development input, which will bring about adverse effect to the healthy development of the whole industry.” Liu Jiangshan worried about the development prospect of the industry.
However, the latest statistical data of CRIA showed that by August, the gross profit of the carbon black industry increased by 136.46% on a year-on-year basis. The profit rate had slight growth, which increased to 1.83% from 0.82% in the corresponding period of last year. The reason that Liu Jiangshan gave is that the profit basis was too low last year, after all.
“It is obvious to all that carbon black enterprises have made unremitting efforts to serve the tire industry with close cooperation between these two industries in recent years. Anyhow, the carbon black industry will still pay close attention to the R&D of the low-rolling resistance carbon black variety series for green tires playing a role in reducing fuel consumption and exhaust gas of auto. We hope the cooperative clients and the downstream tire industry to give full understanding and support to the carbon black industry.” Liu Jiangshan finally declared his opinion.
