Would Russia's Decision to Cut Oil Output, Impact Its Carbon Black Prices?
- 17-Feb-2023 4:26 PM
- Journalist: Jung Hoon
Russia: The price of Carbon Black has consistently been falling in Russia for the last several weeks on the back of dropping oil prices. During the week ending on 10th February, the Carbon Black N220 Hard Grade prices fell by a drastic 9.7%, and the situation has been the same since the fourth quarter of 2022. Russia is already known for its low-cost Carbon Black exports to many countries as they have better availability of raw materials. However, lately, the prices of Carbon Black have been going down severely, which has been concerning its other exporting countries.
Earlier, one of the primary reasons for driving down the Carbon Black prices was its weak demand due to the poor market performances of the downstream tire and automotive industries. Furthermore, the declining oil prices also played a significant role in the Carbon Black price fall. However, since the automotive and tire industries made notable recoveries in the global market, the decreasing oil price has depleted the Carbon Black market value.
According to the latest statement made by Russia, the country will cut down its oil production by 5% or by 500000 barrels per day, starting from March. The Russian officials made this decision after several major economies decided to impose a cap on oil prices. Russia has officially declared that it would not be selling oil to countries that are directly or indirectly associated with the oil cap principles. Russia believes that cutting down its oil production by 5% would restore market relations. Now, the question is, would a reduction in oil production impact prices? If yes, how would it affect the Carbon Black value in the market?
As per ChemAnalyst's anticipations, "The decline in oil production is definitely going to affect the oil prices in the upcoming weeks, and if oil prices rise in the country, the Carbon Black market would for sure gain some stability in the Russian market."