Since last week, the continued uptrend in the domestic high-temperature coal tar market has begun to show signs of strain. In particular, new order prices in the Tangshan area were not finalized until Sunday, ultimately being cut by 50 RMB/ton and leading the market into a downturn, with bearish sentiment in the market gradually intensifying. In this week's auction, Shandong Laigang's high-temperature coal tar was offered at a starting price of 4,050 RMB/ton, and the final transaction price was lowered by 220 to 4,050 RMB/ton, marking a notable decline within the week.
I. Ethylene Tar Market Reaction
During the current period, international crude oil prices fluctuated upward, providing cost support for cracking feedstocks. However, the significant decline in high-temperature coal tar over the same period, coupled with continued weakness in the downstream carbon black market, put clear downward pressure on ethylene tar as substitute feedstock prices fell. Downstream enterprises only made purchases to meet essential needs, with limited willingness to build inventories on a large scale. With multiple factors offsetting one another, the mainstream ethylene tar market maintained a range-bound consolidation this week.
II. Similar Product Market Reaction
For high-temperature coal tar, the consecutive failed auctions at Linhuan on Tuesday further reinforced the market's downward inclination. Consequently, auction prices in all major production areas fell sharply on Wednesday, and the decline subsequently spread across the entire domestic market. Overall, high-temperature coal tar is at a point of contradiction between cost support and negative demand feedback. On the one hand, coking enterprises are suffering deep losses, production cuts are expanding, and coal tar supply is declining, keeping the supply-demand pattern for high-temperature coal tar tight. On the other hand, terminal demand for downstream products remains weak, and downstream plant profitability continues to deteriorate. In the short term, coal tar prices are likely to remain weak, though the downside space is limited.
Negotiations for new orders in the domestic carbon black market remained deadlocked, with limited trading volumes. New order prices in raw material coal tar tenders fell sharply, exerting a strong bearish drag on the market. However, since this week's new orders did not fall within the downstream procurement cycle, downstream players mostly maintained a wait-and-see stance. Recent market offers have remained at high levels, with most transactions consisting of small-lot essential replenishments. The market has been primarily delivering previously placed orders, while new order negotiations were scarce. With raw material prices trending down during the period, market offers are expected to drift lower. In the short term, new carbon black orders are expected to remain weak.
Crude oil prices rose continuously, providing positive sentiment guidance for slurry oil, and market participants' bullish sentiment strengthened. From a supply-demand perspective, spot supplies released to the market decreased, and with some refineries in Shandong approaching scheduled maintenance, slurry oil supply was expected to tighten. Meanwhile, downstream demand from the needle coke and oil blending directions remained strong. Supported by multiple favorable factors, downstream players actively replenished essential inventories, and refineries pushed slurry oil prices up with strong momentum. Overall, the average slurry oil price rose significantly during the period. Contract prices for low-sulfur residue oil/asphalt feedstock were raised, while downstream buyers remained cautious toward high-priced resources; after bargaining between upstream and downstream, residue oil price increases were relatively moderate. Local refineries were reluctant to sell at low prices, and negotiated price levels also moved up in a stepwise manner. Overall, the average residue oil price continued to rise this week. Negotiated price levels for wax oil followed crude oil trends upward before pulling back, with transactions concentrated at medium-to-low levels. This week, the wax oil trading focus edged up slightly, although the average posted a decline.
Demand for coating pitch in downstream applications continues to improve. With high oil prices, new energy vehicles hold a greater advantage over conventional fuel vehicles, and energy storage orders remain robust. Demand for artificial graphite anode materials is rising steadily, with prices supported by both cost and demand.
III. Summary
Yangzi Petrochemical entered maintenance on May 5, 2026, with a planned restart by the end of September; Hainan Refining & Chemical entered maintenance on June 6, with a planned restart in mid-September; and Shenghong Petrochemical entered maintenance on July 1, with a planned restart next week. Some ethylene cracking units are operating at low utilization rates amid losses.
International crude oil prices are expected to have room to rise next week. Carbon black new orders are expected to decline, while the fall in raw material coal tar narrows; downstream tire orders are suppressing high price levels, and carbon black offers will continue to move lower. High-temperature coal tar will maintain a downward consolidation, but with limited space—tight supply combined with essential downstream demand support makes a sustained sharp drop difficult. Slurry oil has supportive supply-demand fundamentals and external sentiment, with prices continuing to rise but at a moderating pace. Overall, ethylene tar will face substitution pressure next week from weakening competing coal tar, although stronger slurry oil and expectations of higher crude oil prices provide some support. With bullish and bearish factors in contention, the market is likely to fluctuate weakly. However, given the tight spot supply and refineries' strong willingness to hold prices steady, the market will likely focus on watchful price support, making a significant near-term pullback in prices unlikely.
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