Ethylene tar, which has no market price, is now in short supply, 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 raw materials typically used for carbon black production. The reporter learned this information from the China Rubber Industry Association on September 9. Earlier, 18 major carbon black companies, each with an annual output exceeding 30,000 tons, met in Tianjin to discuss the ongoing shortage of raw materials since July and urged government agencies to implement stronger macroeconomic controls. Normally, these enterprises operate at full capacity.
According to reports, coal tar and oyster sauce had previously been sufficient for production, but ethylene tar was already tight. However, since July, the domestic supply of carbon black raw materials has become unusually scarce. Prices have surged, and availability has dropped sharply. In some regions, coal tar prices have doubled, while oyster and ethylene tar prices have risen by over 40%. Most areas now lack a stable market, creating an urgent situation for carbon black producers.
It is reported that large-scale carbon black companies have all reduced their output, while smaller ones have nearly stopped production entirely. Even with these cuts, current stockpiles of raw materials will only last until the end of September. If production remains disrupted into October, the combined inventory across all companies and tire factories will only be enough to last about 20 days. This could severely impact tire manufacturing and, by extension, the entire automotive industry.
Industry experts attribute the shortage to three main factors. First, rising heavy oil prices have caused ethylene producers to use ethylene tar as fuel, reducing its availability for carbon black production. Last year, ethylene tar accounted for nearly 15% of carbon black raw materials and almost half of its total production, but this year it has dropped significantly, especially as it now has no market value. Second, glass and ceramic companies are purchasing coal tar and oyster oil as cheaper alternatives to heavy oil, even blocking supplies needed by carbon black plants. Some companies located near coking plants, such as Shanxi Zhixin Chemical and Shanxi Juyuan Carbon Black, are unable to access coal tar. Third, exports of coal tar and oyster sauce have surged—increasing fourfold year-on-year in the first half of this year.
In response, the China Rubber Industry Association urgently called on the National Development and Reform Commission on the 8th to cancel the 13% export tax rebate policy for coal tar and oyster sauce, limit or ban their exports, and coordinate the import of ethylene tar to stabilize the supply chain.
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