North American Carbon Black Market Report
1) First Quarter of 2024: Weak Demand and Stable Supply Lead to Price Declines
The North American carbon black market faced significant challenges in the first quarter of 2024, with prices continuing to decline. A combination of factors contributed to a negative pricing environment. The demand for carbon black weakened, particularly in the electric vehicle (EV) and battery sectors. Technical issues in electric vehicles, such as recalls affecting Tesla, led to decreased procurement of carbon black components. Additionally, high fuel costs and declining consumer confidence slowed demand in the replacement tire market.
Despite some challenges like delivery delays due to the Suez Canal crisis and inventory reductions for financial viability, supply remained stable. However, this stability was insufficient to offset the impact of declining demand. Compared to the same period last year, carbon black prices dropped by 13%, and there was a 15% decline compared to the previous quarter. Prices also fell by 6% between the first and second halves of the quarter.
As the first quarter concluded, the FOB price for hard carbon black N220 delivered in Texas was $1,870 per ton, reflecting the ongoing downward trend in prices. Overall, the North American carbon black pricing environment has been negative, with weak demand and stable supply contributing to price reductions.
2) Second Quarter of 2024: Mixed Market Signals with Stabilizing Prices
In the second quarter of 2024, the North American carbon black market displayed a mixed outlook influenced by various factors. A notable rise in crude oil prices led to increased production costs within the supply chain. Additionally, labor strikes, particularly in the rail sector, disrupted supply routes, further tightening the market. The rising global freight costs exacerbated this situation, hindering imports and compelling local suppliers to raise prices. However, the recovery in the automotive sector stimulated strong demand from tire manufacturers, injecting some vitality into the market.
The U.S. market experienced significant price fluctuations. Seasonal factors, such as summer travel, inevitably boosted tire sales, consequently increasing demand for carbon black. Market sentiment was also influenced by inventory adjustments and speculative buying in anticipation of further supply disruptions. Despite a 6% decline in carbon black sales compared to the same period last year, and a 2% decrease from the previous quarter, the market environment remained positive, with prices stabilizing towards the end of the quarter.
Analysis from the quarter indicated a 2% price increase from the first half to the second half, reflecting heightened demand pressures and tighter supply. By the end of the quarter, the FOB price for hard carbon black N220 in Texas was $1,890 per ton, highlighting a stable and optimistic pricing environment. Overall, after initial volatility, prices in the second quarter of 2024 began to stabilize, laying a solid foundation for future market trends.