Coal tar pitch: narrow range finishing with high impact and obstruction
2023/8/28
The sudden shift in the coal tar market in August is also a normal manifestation of the market's operating pattern. Especially in early August, the coal tar market, which has been relatively stable for nearly two months, quickly rose, with a price increase of 10% in half a month. Downstream enterprises began to reduce periodic demand to alleviate cost pressure. During the same period, the addition of new production capacity by coke enterprises and the increase in production by coke enterprises in various regions led to sufficient supply in the coal tar market, and the market began to weaken from a high level, starting from cost The support for the coal tar pitch market has weakened, and it is expected that the coal tar pitch market may enter a consolidation period in the short term According to Meng Jianjie, the marketing manager of Zhengzhou Dayou Gas Co., Ltd.
Downstream resistance to high prices
According to statistics from Business Society, the price of coal tar asphalt quickly rebounded from around 3000 yuan in mid to late May to around 5000 yuan in early June. The market remained relatively stable from June to July, and deep processing enterprises were able to make small profits during this period. At the end of July, the profit per ton of deep processing enterprises could still be maintained at 100-200 yuan. In early August, due to the increase in raw material costs, the loss per ton of deep processing enterprises had reached around 300 yuan.
Meng Jianjie stated that due to the impact of terminal demand, graphite electrode manufacturers have been in a state of overall profit loss due to high costs recently, and their production is limited, forming a resistance to upstream high priced coal asphalt raw materials. Most enterprises are still digesting the inventory of raw materials with relatively lower prices in July, and the procurement of raw materials slowed down in August, which is also one of the reasons for the rapid decline in bidding prices of multiple domestic coal tar pitch enterprises. In addition, for coal tar deep processing enterprises, except for the price drop of coal tar main products, other deep processing products such as anthracene oil and industrial naphthalene have also shown a downward trend. Downstream enterprises have become more wait-and-see, which has a negative impact on the market.
Weakened raw material support
The head of a coking enterprise in Inner Mongolia reported that this year's coal tar market is basically positively correlated with the trend of the coal tar market. The price of coal tar has rebounded and risen since late May this year, and the price of coal tar asphalt is also the same. Especially in late July, the upward trend of coal tar was in line with the pace of coal tar, but the price increase of coal tar in the past three months has been around 80%, still lower than the price increase of coal tar. Therefore, during the adjustment of the high point decline in the coal tar market in mid August, the raw material end of the coal tar market lost support, leading to a rapid decline in the market, and the decline exceeded the range of raw coal tar. Among them, there was a risk concentration release factor after the previous large increase.
Henan trader Yan Shaoqi stated that due to the lower prices of raw coal tar and the continuous decline in the series of products of deep processing enterprises, the loss situation of coal tar deep processing enterprises is continuously expanding. In the short term, deep processing enterprises will limit production and maintain prices, which may provide support for the declining coal tar market. However, due to the recent release of new production capacity by coking enterprises and the increase in operating rates of some enterprises, the coal tar market has sufficient supply. If the coal tar market drops again, it is not ruled out that it may drag down the future market of coal tar.
Short term shock consolidation
According to statistical data, as of August 18th, the comprehensive operating rate of domestic coal tar deep processing enterprises was 47%, with a weekly decrease of 1.5%; The comprehensive operating rate of coke enterprises is 75.6%, with a weekly growth rate of over 0.7%.
Senior market commentator Shao Huiwen believes that in the current stage of long short game in the market, it is inevitable for the coal tar pitch market to fluctuate and consolidate. This year, the market correlation between raw coal tar and coal tar is strong. However, when both sides rose in May, the market trend of coal tar deviated in stages. However, after the rapid decline and adjustment of the coal tar market in mid August, it has been corrected and kept in sync with coal tar. At the same time, domestic coal tar deep processing enterprises have begun to implement a production limit and price protection strategy. In this context, the coal tar asphalt market has limited volatility and a high probability of narrow consolidation in the short term. Moreover, with the arrival of the traditional peak demand season of "Golden Nine Silver Ten", the recovery of downstream and terminal demand is still foreseeable.
Industry insiders have analyzed that the current bearish factors in the coal tar market include a wide decline in the price of raw material coal tar, a strong wait-and-see sentiment among downstream enterprises, and graphite electrode manufacturers still experiencing losses; Positive factors include a downward trend in the operating rate of coal tar deep processing enterprises in late August, a decrease in inventory of coal tar enterprises, and a potential increase in seasonal demand. Overall, it is expected that the short-term coal tar pitch market will still be dominated by narrow consolidation. It is recommended that the industry pay attention to the investment of new production capacity by coke enterprises, changes in operating rates of deep processing enterprises, and the recovery of the terminal market, layout in advance, control risks, and seize favorable opportunities for stage demand.
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