Downstream Intention Slows, Tar Prices Continue to Decrease (March 17-March 24)

From March 17 to March 24, 2023, the production price of coal tar in Shanxi Province was significantly reduced. According to the monitoring by the Business News Agency, the average market price for the weekend last week was 5012.5 yuan/ton, while the average market price for the weekend this week was 4705 yuan/ton, with a weekly decrease of 6.13%.



The K-bar chart of commodity prices uses the concept of a price trend K-line to reflect weekly or monthly price changes in the form of a histogram. Investors can buy and sell investments based on the changes in the K-bar chart. Red indicates: rising; Green indicates a decline; The height of the K column indicates the range of fluctuation. From the above monthly coal tar K-column chart, it can be seen that since November 2022, the coal tar market has been declining for three consecutive months, and prices have started to rise since February. The weekly K-bar chart shows that the coal tar market has been declining for six consecutive weeks, with prices gradually recovering after the Spring Festival, and has been declining for five consecutive weeks since the end of February.


The coal tar (high-temperature) commodity index on March 23 was 171.12, down 1.72 points from yesterday, down 26.07% from the cycle’s highest point of 231.47 points (2022-11-09), and up 262.93% from the lowest point of 47.15 points on December 6, 2015. (Note: The cycle refers to 2011-09-01 to now).


This week, the bidding price of coal tar in Shanxi Province was mainly down, with the mainstream implementation of 4650-4750 yuan/ton, a decrease of 250-350 yuan/ton compared to last week’s auction price. This week, the trend of commodities in the deep processing industry is mainly downward, and the purchase of tar remains just in demand. Under the influence of lower purchasing intentions in the downstream, coking enterprises have been selling out profits this week, resulting in a significant decrease in the overall auction price and a weaker overall market atmosphere.


Supply: High and stable operating rate of coking enterprises, stable tar supply


Supply: High temperature coal tar is one of the main by-products in the production process of coke. Monitoring the operation of coking enterprises can provide a visual understanding of the supply of coal tar. From the above figure, we can see that since 2023, the operation rate of coking enterprises has continued to rise steadily, and significantly increased in mid February. According to the business community, the current operation rate of coking enterprises remains around 75%, and the overall supply of coal tar is relatively sufficient, Referring to the data from previous years, after the end of the heating season in March, coking enterprises will enter the peak production season, and the operating rate will continue to steadily increase, with a relatively sufficient supply of tar in the future.


Demand: The price of deeply processed products has fallen, but they are still in demand



Demand: Industrial naphthalene, anthracene oil, wash oil, and coal tar pitch are the main commodities in the coal tar deep processing industry. Since March, the prices of commodities related to deep processing have been lowered for three consecutive weeks, and the downstream industry has become increasingly resistant to high-priced raw materials, resulting in a further decline in its ability to receive goods. Due to the drag of demand, the tar price has been lowered for three consecutive weeks, with a cumulative decrease of 550-600 yuan/ton. The operating rate of the deep processing industry has basically maintained a normal level of around 50%, and there is still a strong demand for tar.


On March 24th, the auction of the Japanese week basically ended, and the tar price in the main domestic production areas was mainly down, but each underground adjustment range was different. The decline in Shanxi region was relatively large, with a significant price difference compared to other regions. The mainstream price in Shanxi is 4650-4750 yuan/ton, with a decrease of 250-350 yuan/ton. In Shandong, it is 5000 yuan/ton, down by about 50 yuan/ton. In Hebei, the price is between 4850-4900 yuan/ton, with a decrease of 50-100 yuan/ton. In Henan Province, it is 4950-4980 yuan/ton, down 100-130 yuan/ton.


In the future, as the weather turns warmer, the starting of coking enterprises should gradually increase to more than 80% based on previous years, and the market expects the overall supply of coal tar to be in a normal and relatively loose state. The overall operating rate of the downstream deep processing industry is relatively stable, and there is still a rigid demand for coal tar. However, with the weak price trend of deep processing products, there is a strong mentality to suppress tar. In the future, the business community believes that in the light of loose supply expectations and a downward pressure on prices, the coal tar market is expected to maintain a weak trend in the short term. In the future, it is necessary to focus on the price trend of downstream industrial naphthalene, anthracene oil, wash oil, and coal tar.

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