Entering June, the domestic ethylene tar market has shown an upward trend. As of June 1st, the price of ethylene tar in North China stood at 3,600 yuan/ton, with a daily increase of 4.35%. It has risen by 250 yuan/ton over two consecutive weeks, marking a 7.46% increase. The reasons for the price hike are analyzed as follows:
1. Driven by high-temperature coal tar, similar product prices rise strongly
Currently, the domestic high-temperature coal tar market continues to see significant increases, with bullish factors dominating: downstream operations remain at high utilization rates, providing strong demand support; spot supply is tight; deep-processing enterprises still have profit margins; and carbon black new order quotations are following suit with upward adjustments. Additionally, influenced by coal mine safety accidents, there is an expectation of reduced coal tar supply in the future, and the short-term market still has upward momentum. However, due to rising costs in the downstream carbon black sector, market participants are adopting a cautious stance, with limited purchasing enthusiasm and actual transactions. Negotiations are under pressure, and the increase this week is expected to narrow.
2. Downstream carbon black follows the uptrend
Rising costs have influenced market sentiment. After the cost price increase widened, it drove up new order quotation prices in the carbon black market. Coinciding with the end of the month and beginning of the next—an important negotiation period for new orders in the downstream tire market—upstream manufacturers maintain a firm pricing stance, supporting market negotiations. In June, driven by the price rise in the raw material coal tar market, new orders in the carbon black market are expected to increase compared to last month.
3. Ethylene tar supply remains tight, underpinning upward price momentum
On the supply side, ethylene tar maintenance activities are concentrated, leading to a sharp reduction in external supply. Sinopec Yangzi Petrochemical entered maintenance in June, reducing commercial volumes; from June to July, Sinopec-SK (Wuhan) Petrochemical, Shenghong Petrochemical, and Hainan Refining & Chemical will undergo phased maintenance, further decreasing external supply. Gulei Petrochemical's unit is not yet operational, so no external sales are available; Maoming and Jieyang petrochemical plants have shifted to self-use, curbing external supply.
4. Auction prices rise, providing additional support
The auction price of ethylene tar at Yulong Petrochemical has climbed to 4,000 yuan/ton, lending support to the market.
In summary, under the combined effects of shrinking supply, rising coal tar prices, and leading auction price increases, it is expected that the main ethylene tar prices will continue to rise and shift higher this week.
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