Coal tar pitch: Overstated values and underestimated actual levels; difficult for the market to perform well

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This post was last edited by Yan Xiangsi on 2011-7-25 at 18:36. Recently, the domestic coal tar pitch market has maintained a stable atmosphere with decent transaction volumes. The prices of raw material coal tar have remained high, and there are signs of slight increases in some areas. After a prolonged period of decline, the domestic spot aluminum market showed signs of recovery over the weekend, with prices rising significantly. This continues to support demand for coal tar pitch in the carbon industry, allowing for normal procurement activities. According to manufacturers’ quotes, there is still a slight upward trend in coal tar pitch prices. However, as our site has learned, due to various factors, the actual transaction prices are somewhat lower than these manufacturer quotes; currently, stability prevails.

Overall, domestic coal tar prices remain stable, with only some manufacturers in certain regions attempting to drive up prices due to supply constraints. Currently, the premium price for coal tar in these areas is 2,500 yuan per ton, mainly found in regions such as Linfen and Yuncheng in southern Shanxi. It is understood that efforts to regulate illegal coal mines in these areas remain strict, and coking plant operations have not increased significantly compared to before. As a result, coal tar supplies remain tight, leading to slow price increases with limited room for further rise. In other regions, coal tar prices are relatively stable. Although prices are rising, the pace is slow and the increase is not substantial. This prevents downstream coal tar pitch manufacturers from raising prices significantly, and carbon manufacturers also resist any hasty increases in coal tar pitch prices.

Recently, some manufacturers have raised the prices of medium-temperature asphalt to 1,900–2,000 yuan per ton, and the prices of modified asphalt to 2,100–2,200 yuan per ton. However, it is very difficult to achieve actual transactions at these prices. Most manufacturers are still adhering to the prices outlined in previous contracts, with medium-temperature asphalt being sold at around 1,700–1,800 yuan per ton, and in Shanxi region at 1,600–1,700 yuan per ton. Currently, both upstream and downstream parties have some level of support, so although prices are not rising significantly, manufacturers still have an inclination to manipulate prices.

The domestic coal tar pitch market still has ample supply, and this situation is unlikely to change in the short term. Additionally, downstream demand remains stable, with no signs of further increase, which gives downstream parties sufficient reasons to prevent price rises. Moreover, regarding coal-based fuel oils, some manufacturers sell these products as an alternative to coal tar pitch, thereby reducing their inventory pressures. Some manufacturers report that there has been a slight increase in inquiries from downstream customers recently, but neither transaction volumes nor prices have increased significantly. The market for coal-based fuel oils remains stable, with many long-term contracts in place, making it difficult to see significant growth. Most manufacturers are cautious about the future prospects of coal-based fuel oils.

As is well known, international crude oil prices have fluctuated sharply recently, but overall they have shown an upward trend. As of the time of writing, WTI crude oil futures were trading at 96.70 dollars per barrel. Due to high costs, many domestic refineries reduced production, leading to a decrease in heavy oil output and subsequent price increases. However, after the National Development and Reform Commission announced policies to raise refined oil prices, domestic refineries began to resume operations, and diesel supply returned to normal levels. Heavy oil supply became sufficient, causing prices to stop rising and stabilize. Currently, downstream customers are waiting to see what happens, but overall they still prefer heavy oil. Coal-based fuel oils serve merely as a substitute for heavy oil, so it’s not advisable to be overly optimistic about their future prospects.

The future of coal tar pitch is likely to remain stable. With support from upstream costs and favorable downstream demand, there is no possibility of a decline. However, ample supply in the market continues to affect the development of the coal tar pitch market. The trend is expected to remain stable, with limited room for further price increases.