Declining Carbon Black Prices, Is Europe Experiencing Calm Before the Storm?

Hamburg, Germany: All the anticipations around the energy crisis in the European nations as soon as winter approached proved wrong as Europe handled the situation well. The expected energy crisis did not happen in the region till the fourth week of November 2022, and the market condition remained stable. However, as the winter peaks and the demand for energy rises from households and industries, what would be the situation then? The pricing trend of Carbon Black, a downstream product of Natural gas and Naphtha, remained mostly declining throughout the month. During the current week, the assessed price of Carbon Black Hard Grade N220 was USD 2385/MT FD Hamburg, which indicates a drop of almost 1.5%.

The prices of Carbon Black have been declining in Europe on the back of reducing energy prices and decreasing downstream demand from the tire and automotive industries. As automobile sales have been declining in the region, the offtake of Carbon Black has also reduced. Furthermore, as Europe managed to avoid the scarcity of natural gas and kept the storage at a sufficient level, the cost of Carbon Black production dropped and caused a significant dip in its market value.

This decrease in Carbon Black prices will likely continue until the end of December 2022, no matter the energy situation. As the destocking of available materials occurs in December, the prices usually go down because manufacturers focus on clearing off their stocks even at a cheaper cost. However, January could be difficult for Carbon Black buyers as the prices might surge due to the region's peak winter days and consequent energy crunch. Stock Clearance in the previous month, followed by lesser availability of energy in January, could lead to supply disruptions and be a reason behind the price hike of Carbon Black.

As per ChemAnalyst anticipations, "The price of Carbon Black would continue with its downward trend in Europe in the upcoming weeks as the market has been experiencing lesser downstream demand from automotive and tire industries. Additionally, stable energy situations have been another factor supporting the price drop of Carbon Black."