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Stricter raw material supply combined with rising demand for high-end products: Recently, the Industry and Information Technology Bureau of Tangshan City in Hebei Province issued a statement stating that the two 5.5-meter coke ovens at Tangshan Guoyi Special Steel Co., Ltd. were shut down on April 18 and passed municipal inspection. This suspension affects a coke production capacity of 1.1 million tons (annual capacity, the same below). Since 2024, the city has announced the shutdown and demolition of 8 coke ovens belonging to 4 companies, resulting in the withdrawal of over 5 million tons of coke production capacity from the market. Provinces such as Shandong, Henan, and Inner Mongolia are also continuing to work toward phasing out coke oven production capacity that does not comply with policy regulations. In the face of the trend toward deeper structural adjustments and a transition toward greener, lower-carbon development in China’s coking industry, a responsible official from the China Coking Association said, “Against the backdrop of global energy transformation and the upgrading of the chemical industry, the industrial chain for the deep processing of coal tar is undergoing profound changes.” Changes in the upstream supply landscape, the high costs and pressure for technological upgrades in the midstream segment, as well as the demands for higher quality, greener, and more intelligent products in the downstream market – all these factors are driving the accelerated transformation of the entire industry. The pace of upgrading the industrial chain must be accelerated in the future to effectively address risks and seize opportunities. ” Growth or slowdown in supply According to Li Xiaofei, the sales manager at Chifeng Boyuan Technology Co., Ltd., coal tar is a key raw material for producing aromatics, carbon materials, and fine chemicals; it plays a vital role in ensuring energy security and promoting the diversified development of the chemical industry. In recent years, with the phasing out of outdated production capacity across various regions and the replacement of old with new capacity, coke production has generally shown a trend of steady or slight decline. In terms of production capacity distribution, coal-producing regions such as Shanxi, Inner Mongolia, and Hebei, thanks to their abundant coal resources and well-developed coking industries, account for over 60% of the country’s coking production capacity; they also hold a dominant position in coal tar production. In 2024, China’s coke production was approximately 470 million tons, a slight decrease of 0.5% on a year-on-year basis, with about 20 million tons of coal tar being produced as a by-product. Li Xiaofei said that stricter environmental policies have led to the closure of some small coking enterprises that did not meet environmental standards. As policies aimed at reducing coking production continue to be implemented, coking output is expected to decline further, and the supply of coal tar as a raw material may remain constrained, resulting in shortages of raw materials for companies engaged in the deep processing of coal tar and rising costs for them. Process technology needs to be upgraded. Zhang Xinghua, a senior engineer at Zhengda Industrial Engineering in Henan Province, said that the midstream deep processing stage is the core part of the coal tar industry chain, with various technical approaches available. Atmospheric and vacuum distillation are fundamental processes, and many enterprises in China still rely primarily on distillation techniques. Hydrogenation technology has developed rapidly in recent years, enabling the improvement of product quality and the production of clean petroleum products as well as high-value aromatic compounds. At present, the hydrogenation process has been industrially applied in Jiangsu, Shanxi, Henan, Inner Mongolia, Xinjiang, Hebei, and other regions. According to statistics, by the end of 2024, China’s total production capacity for the deep processing of coal tar had exceeded 26 million tons, with an average annual growth rate of around 3% over the past five years. However, due to outdated manufacturing technology, the capacity utilization rate remains at 75%–80%. The product quality of some older devices is unstable, lacking market competitiveness. Regionally, although the East China region has relatively limited coal resources, it has achieved rapid development in the processing of high-end fine chemicals thanks to its advantages in technology, market access, and transportation; the production capacity of special carbon materials in this region accounts for over 50% of the national total. Regions such as North China and Northwest China possess resource advantages and an industrial foundation; there are already several large-scale projects for the deep processing of coal tar. From the perspective of advanced processing technologies, a pattern of \"bringing in technologies from the East and introducing them to the West\" has taken shape, and comprehensive technological upgrades are expected. The high-end market needs to be expanded. Meng Jianwei, the head of Henan Ruiyuan New Energy Chemicals, said that the deep processing of coal tar has a wide range of applications in downstream industries, covering key areas such as carbon black, pharmaceutical intermediates, and new energy materials. In the field of carbon black production, coal tar is the main raw material used for its manufacture. In 2024, China’s carbon black production amounted to approximately 5.5 million tons, of which 70% was used in tire manufacturing, while the remaining portion was used in rubber products, inks, coatings, and other applications. In the field of pharmaceutical intermediates, phenols and naphthenes extracted from coal tar are important raw materials for synthesizing various drugs, and market demand for them is growing steadily. In the field of new energy materials, needle coke, as a key raw material for lithium battery anode materials, is experiencing explosive growth. In 2024, China’s demand for needle coke will reach 1.2 million tons, representing a growth rate of over 20% compared to the previous year. In addition, pitch-based carbon fibers have also emerged as a valuable material for use in high-end fields such as aerospace and sports equipment, offering broad market prospects. Managers from several deep-processing enterprises said that competition due to product homogenization is currently quite fierce, with many companies operating on the brink of profit or loss, which results in a low industry utilization rate. Facing the increasing demand for high-performance electronic chemicals and special carbon materials in emerging fields such as new energy, aerospace, 5G communications, and artificial intelligence, the deep-processing industry of coal tar will also encounter new opportunities. Industry experts say that in the future, the deep processing industry of coal tar will develop in the direction of higher sophistication, greener practices, and greater intelligence. High-end development requires an upgrade of the product structure in order to increase the added value of products and their competitiveness in the market. Green development calls for energy conservation and emission reduction during the production process, as well as efficient use of resources and environmental sustainability. Intelligence involves making use of technologies such as the industrial Internet, big data, and artificial intelligence to achieve automated control of production processes, predictive maintenance for equipment failures, and optimized management of supply chains, thereby improving production efficiency and the level of enterprise management.