On September 9, the China Rubber Industry Association revealed that ethylene tar currently has no market price, while coal tar and oyster sauce are being exported in large volumes. This has led to a complete disruption in the supply of the three key raw materials used in carbon black production. The situation has raised serious concerns among major carbon black manufacturers across China.
Earlier this month, 18 large-scale carbon black companies—each producing over 30,000 tons annually—gathered in Tianjin to discuss the ongoing shortage of raw materials since July. They urged government authorities to step up macroeconomic control measures to stabilize the supply chain. Normally, these companies operate at full capacity, but the current crisis has forced them into emergency action.
According to reports, coal tar and oyster sauce had previously met production needs, with ethylene tar being the only slightly tight resource. However, starting in July, the domestic supply of carbon black raw materials became unusually scarce. Prices have skyrocketed, and availability has dropped dramatically. In some regions, coal tar prices have doubled, while oyster and ethylene tar prices have each risen by more than 40%. Most areas now lack a functioning market for these materials, creating an urgent supply crisis for the carbon black industry.
Industry sources indicate that all large-scale carbon black producers have reduced output, while smaller enterprises have largely ceased operations. Even with these cuts, stockpiles of raw materials are expected to last only until the end of September. If production remains disrupted into October, the combined inventory of carbon black companies and tire plants will only be enough for about 20 days of use. This could severely impact tire manufacturers and, by extension, the entire automotive industry.
Experts from the industry point to three main causes behind the raw material shortage. First, rising heavy oil prices have led ethylene producers to use ethylene tar as fuel, reducing the amount available for carbon black production. Last year, ethylene tar accounted for nearly 15% of the raw materials used in carbon black, and nearly 50% of its production was allocated to the sector. This year, however, usage has plummeted, especially as ethylene tar now lacks a market price. Second, glass and ceramic companies have been purchasing coal tar and oyster oil to replace expensive heavy oil, often blocking supplies meant for carbon black producers. Companies like Shanxi Zhixin Chemical and Shanxi Juyuan Carbon Black, which are located near coking plants, are unable to access coal tar. Third, exports of coal tar and oyster oil have surged—increasing fourfold compared to the same period last year.
In response, the China Rubber Industry Association urgently appealed to the National Development and Reform Commission on September 8, requesting the cancellation of the 13% export tax rebate policy on coal tar and oyster sauce. They also called for restrictions or a ban on the export of these materials and asked relevant departments to coordinate the import of ethylene tar to ease the supply crisis.
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