Carbon Black Market Dynamics Report (Recent Updates)

I. Price Trends
- Recent Prices: From May 21 to May 26, 2026, the carbon black market witnessed a downward price trend. The mainstream N220 grade was priced at RMB 8,100 per metric ton in Shandong, Hebei, and Guangzhou; RMB 7,850 per metric ton in Shanxi; and RMB 7,900 per metric ton in Zhejiang. This represents a 3.58% decline compared to early May.
- Historical Prices: Since 2023, the carbon black market has experienced volatile and generally declining prices, driven by fluctuations in feedstock oil prices, overcapacity, and sluggish downstream demand. In 2025, China’s carbon black industry achieved a market size of RMB 38.49 billion, with an average market price of approximately RMB 6,405.8 per metric ton. The entire industry operated under marginal profitability—or even incurred losses.

II. Supply-Demand Situation
- Supply Conditions:
- China’s carbon black production capacity continued steady growth, reaching 9.967 million metric tons in 2025, while output stood at 6.877 million metric tons and apparent domestic demand totaled 6.0093 million metric tons—resulting in an operating rate below 70%.
- Equipment utilization and capacity utilization rates remain low, and output growth has been modest, intensifying supply-demand imbalances.
- Primary raw materials for carbon black production include coal tar, ethylene tar, anthracene oil, and other feedstock oils; thus, their price volatility significantly impacts carbon black market pricing.
- Demand Conditions:
- Carbon black is widely applied across downstream sectors including tires, plastics, pigments, and coatings—with the tire industry representing the largest consumption segment.
- In recent years, Chinese tire manufacturers’ overseas expansion—including new facilities in Vietnam, Thailand, and Cambodia—has boosted demand for supporting carbon black exports. In 2025, China’s carbon black exports reached 1.1782 million metric tons, up 22.52% year-on-year.
- However, carbon black exports declined by 5.06% year-on-year in Q1 2026; a rebound is anticipated in Q2, supported by the cost advantage between domestic and international production.

III. Import-Export Situation
- Imports: In 2025, China imported 310,400 metric tons of carbon black, an increase of 3.59% year-on-year. The average import price was approximately RMB 13,862.8 per metric ton, rising 1.37% year-on-year. Domestically produced carbon black remains dominated by conventional grades, whereas high-end products such as conductive carbon black are still largely import-dependent.
- Exports: In 2025, China exported 1.1782 million metric tons of carbon black, up 22.52% year-on-year. The average export price was RMB 7,461.8 per metric ton, down 16.07% year-on-year. Export gross margins remain higher than those from domestic sales, facilitating domestic capacity absorption.

IV. Industry Developments
- Industry Concentration: Currently, concentration in China’s carbon black industry remains relatively low. Intense competition persists among producers of low-end carbon black, resulting in narrow profit margins. In contrast, medium- and high-end products—such as conductive carbon black—face substantial demand gaps and command comparatively higher profitability.
- Environmental Regulations: As national environmental standards continue tightening, carbon black enterprises are increasing investment in environmental compliance and technological upgrading. While this raises operational costs, it also drives industry transformation and upgrading.
- Mergers & Acquisitions: Smaller-scale production facilities and those failing to meet environmental standards face growing pressure for elimination. Industry consolidation through mergers and acquisitions is expected to accelerate.

Analysis & Assessment

I. Reasons for Price Decline
- Feedstock Price Volatility: A recent drop in feedstock oil prices reduced carbon black production costs, exerting downward pressure on market prices.
- Supply-Demand Imbalance: Persistent overcapacity and worsening supply-demand mismatches continue suppressing market prices.
- Sluggish Downstream Demand: Weak demand from end-user sectors—particularly tires—exerts bearish pressure on carbon black pricing.

II. Export Analysis
- Export Volume Growth: Overseas expansion by Chinese tire manufacturers has stimulated demand for companion carbon black exports. Concurrently, favorable domestic-international cost differentials continue to support export competitiveness.
- Declining Export Prices: Despite increased export volumes, average export prices declined year-on-year—likely attributable to intensified international competition and shifts in export product mix.

Forecast

I. Price Trend Outlook
- Short-Term: In the near term, carbon black prices are expected to remain under downward pressure due to feedstock price fluctuations, persistent supply-demand imbalances, and subdued downstream demand—leading to continued volatile and generally declining trends.
- Long-Term: With increasingly stringent environmental regulations and accelerating industry consolidation, the carbon black sector is gradually evolving toward greater concentration and scale-based operations. Over time, improved supply-demand equilibrium and rising demand for high-end products may stabilize—and eventually lift—carbon black market prices.

II. Supply-Demand Outlook
- Supply Side: Carbon black production capacity is projected to grow further over the next few years, albeit at a decelerating pace. Meanwhile, stricter environmental requirements and intensified M&A activity will likely phase out small-scale and non-compliant production facilities.
- Demand Side: Steady development of downstream industries—including tires—and expanding demand for premium-grade carbon black products will sustain stable growth in overall demand. Furthermore, export markets will remain a key growth driver for the industry.