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Comparison of Data Indicators for the Traditional Coal Chemical Industry from September to October Author/Source: Date: 2022-10-20 Clicks: 6 Coking, Advanced Processing of Coal Tar, Advanced Processing of Crude Benzene, Profits Introduction The traditional coal chemical industry uses coal as a raw material and employs chemical processes to convert it into gaseous, liquid, and solid fuels as well as chemicals. This article focuses on the coking – advanced processing of coal tar – benzene industry chain. “During the golden September and silver October period, prices of traditional coal chemical products generally rose. The increase in prices in September was mainly driven by high costs and upstream companies’ stockpiling ahead of the holiday season, while the upward trend in prices continued in October due to high costs. Due to significant cost pressures, profits and operational levels in the coking and coal tar deep processing industries have declined; in the fourth quarter, high cost pressures will continue to pose challenges to these industries, and it is expected that profit levels in these traditional sectors will keep falling. Price comparison — After the holiday break, prices of most products in the traditional coal chemical industry rose. http://img.yf116.cn/image/img/20221020/825233032397.jpg In September, aside from coke, prices of all other products in the traditional coal chemical industry chain increased. High costs and pre-holiday stockpiling by downstream manufacturers were the main factors behind these price rises. The decline in the coke market was mainly due to insufficient demand from downstream steel mills and an excess supply in the market. At the opening after the holiday, aside from a decline in the price of crude benzene and stable prices for washed oil and carbon black, all other traditional coal chemical products showed an upward trend. After the holiday, the crude benzene market showed strength at first before weakening; the decline in international crude oil prices affected buyers’ willingness to place orders, causing the market focus to shift downward. Due to high cost pressures, products in the deep-processing industry chain for coal tar tend to see price increases ； Coke prices have shown an upward trend in the market, as there has been a temporary shortage of supply due to issues related to coke-making products. Additionally, steel mills downstream maintain low coke inventories, leading to increased inquiry activity from enterprises. http://img.yf116.cn/image/img/20221020/82624303841.jpg Compared with the changes in operations before and after holidays in traditional coal chemical industries, production in the coking and coal tar deep processing sectors declined, by 3.7 and 3 percentage points respectively. The decline in coking industry production was mainly due to corporate losses and poor transportation conditions in the Northwest and Shanxi regions, which forced companies to operate at reduced capacity ； The decline in production volume in the deep processing industry of coal tar is attributed to the seasonal maintenance activities carried out by some companies as part of this industry’s routine, as well as poor transportation conditions in certain areas, which have led to delays in operations and an increase in reduced production levels among these companies. The increase in operations in the hydrogenated benzene industry is mainly driven by the gradual resumption of production by companies that had been undergoing maintenance; as a result, these companies’ production capacity increases and their operational load rises slightly. http://img.yf116.cn/image/img/20221020/828253050524.jpg After the holiday, profit levels in the traditional coal chemical industry varied; the coking industry and the carbon black industry experienced increased losses, amounting to 66 yuan per ton and 650.55 yuan per ton respectively. Profit levels in the deep processing of coal tar declined, going from 209.51 yuan per ton before the holiday to 180.53 yuan per ton after it. The worsening losses in the coking and carbon black industries, as well as the decline in profits in the deep processing sector, are both caused by increasing cost pressures; insufficient development of new products has led to a drop in profit levels. The profit margins in the hydrogenated benzene industry have improved, as the price of crude benzene, a key raw material, declined after the holiday, reducing cost pressures and enabling companies to achieve modest profits. Based on the post-holiday industry data and industry characteristics, the main pressure facing the traditional coal chemical industry in the fourth quarter stems from cost factors. From the perspective of coking raw materials such as coal, to the raw materials used in the two major product lines derived from benzene – namely the benzene chain and the coal tar deep processing chain – there is still a shortage of these materials. As a result, prices are likely to remain high or continue to rise throughout the fourth quarter. This is especially true for high-temperature coal tar, where there is a significant imbalance between supply and demand, with strong demand from downstream industries. It is expected that prices could reach new highs in November and December. Consequently, the high cost pressures on the deep processing industry will not ease, and the market may enter a loss-making situation during those months, with the extent of losses likely to increase over time. Due to the high costs currently driving down industry profit levels, companies are under significant pressure in terms of their financial resources. Purchasing practices across various industries have changed; faced with high raw material costs and low profit margins, most companies choose to purchase goods only as needed and operate at reduced capacity as a way to cope. However, for enterprises engaged in the deep processing of coal tar, the imbalance in raw material supply due to industry overcapacity is quite severe, and there remains a strong expectation of rising raw material prices. Therefore, despite being cautious in their raw material purchases given the current profit situation, some companies still wish to acquire more raw materials, and the adjustment of the industry structure continues.