I. Coal Tar Industry Chain

In May, the domestic coal tar market saw an average spot price of approximately RMB 3,644 per ton, down RMB 203 per ton from the previous month (RMB 3,847), a decline of 5.28%. Price ranges were as follows: Shanxi, Hebei, and Shandong—RMB 3,780–4,180 per ton; Southwest China—RMB 3,550–3,900 per ton; Northeast China—RMB 3,290–4,010 per ton; and Northwest China—RMB 3,260–3,850 per ton.

This month, the coal tar market has been trending lower, with the following key factors driving price fluctuations:

1. Supply Side: This month, coking coal prices edged up, while coke prices have risen in three consecutive rounds. Coking enterprises are enjoying reasonable profit margins, and overall industry operating rates remain at high levels, driving a gradual build-up of coal‑coke‑tar inventories.

2. Demand Side: Deep-processing coal tar enterprises are currently operating at a loss across the board, with subdued purchasing appetite. Coupled with the continued decline in downstream deep-processing product prices, this has further weighed on the coal tar feedstock market. By contrast, the carbon black industry is seeing stable operating rates with limited volatility, and producers remain cautious and conservative in their raw-material procurement, adopting a measured purchasing pace. This has provided strong support for coal tar prices, helping to offset negative market factors.

Next month’s key product markets and forecasts:

Coal tar: Coal tar prices are expected to trend upward in June. Next month, coking plant operating rates are forecast to decline, leading to a slight contraction in coal‑tar supply. Meanwhile, downstream deep‑processing enterprises are seeing a steady recovery in operating levels, with corresponding increases in raw‑material procurement demand, providing support for coal‑tar prices. In particular, coal pitch prices remain firm, further underpinning the overall raw‑material market. The carbon black market is expected to remain stable, with limited room for price fluctuations, resulting in relatively modest demand support and price impacts on coal tar.

Coal Pitch: The coal pitch market is expected to trend higher next month. In June, raw material prices for coal tar fluctuated upward, providing cost support for coal pitch. Looking ahead, deep-processing coal‑tar enterprises are likely to see a rebound in operating rates, leading to an increase in coal‑pitch supply. On the demand side, purchases remain largely driven by essential needs, with subdued trading activity and lackluster transaction performance.

Industrial Naphthalene: The industrial naphthalene market is expected to trend stronger in June. Cost-side support remains robust, while on the supply front, deep-processing coal‑tar enterprises are steadily resuming operations, leading to a modest increase in naphthalene availability and exerting some downward pressure on prices. On the demand side, the major downstream phthalic anhydride market—produced via the naphthalene route—remains stable, with solid underlying raw‑material procurement; coupled with the restart of certain downstream facilities, demand is further picking up, providing favorable momentum for the industrial naphthalene market.

Anthracene Oil: Domestically, the anthracene oil market is expected to trend upward next month. Cost‑side support remains relatively strong, influenced by the coal tar market. With the operating rates of deep‑processing coal tar enterprises projected to rebound across the board, supply in the anthracene oil market is set to increase. Meanwhile, downstream carbon black demand is primarily driven by essential, rigid requirements.

Carbon Black: The carbon black market is expected to remain relatively strong in June. Rising prices for feedstock—coal tar and anthracene oil—provide robust support to production costs. Downstream tire manufacturers largely maintain spot‑demand purchasing, keeping overall demand stable.

II. The Raw Benzene Industry Chain

In May, domestic crude benzene prices first declined and then rose, before falling again at month’s end. Coking coal prices edged up slightly, while washed‑oil prices fluctuated, causing crude benzene costs to move in tandem. This month, coking coal prices increased in three rounds, boosting coking‑plant profitability; industry operating rates climbed steadily, leading to a modest rise in crude benzene supply. On the demand side, hydrogenation plants saw month‑on‑month increases in operating rates, providing solid support for crude benzene.

The detailed analysis of the trends for our key products next month is as follows:

Crude Benzene: The crude benzene market is expected to remain weak next month. Crude oil prices, influenced by geopolitical factors, are likely to trade in a volatile range. Coking plant operating rates are forecast to decline slightly, leading to a reduction in crude benzene supply. The pure benzene market is expected to trend lower, providing limited support to the crude benzene price. Meanwhile, hydrogenation‑based benzene producers’ demand for feedstock is poised to pick up, offering some tailwind to the crude benzene market.

Crude Oil: The crude oil market is expected to remain volatile in June. At present, close attention should be paid to developments in the U.S.-Iran and Russia-Ukraine geopolitical situations; the future trajectory of these tensions remains uncertain and will continue to influence oil price dynamics.
Hydrogenated benzene: The hydrogenated benzene market is expected to remain on a downward trajectory in June. As geopolitical tensions ease, oil prices have weakened, leaving the benzene value chain without upward momentum. Industry operating rates have edged down slightly, with supply remaining ample, while downstream demand remains sluggish due to losses. With no significant positive catalysts in sight, the weak price trend is likely to persist.

Petroleum benzene: The domestic pure benzene market is expected to remain at low levels in June. On the cost side, international crude oil prices have been volatile and weakening, providing insufficient support for the pure benzene market. On the supply front, geopolitical factors have led to a reduction in imported supplies, tightening market availability and creating some favorable conditions. Demand remains largely driven by essential, rigid‑demand purchases, with limited upward momentum.

Toluene: In June, the toluene market is expected to trend lower initially before rebounding. On the supply side, plant maintenance and restarts are occurring in tandem, with rising inventories clashing with temporary support. Demand for petroleum products remains subdued, and with limited growth in demand from disproportionation units, even as new downstream facilities come online, export‑driven price boosts have been modest. Meanwhile, easing geopolitical tensions have weighed on international oil prices, weakening cost‑supportive factors. Coupled with lingering uncertainties in U.S.–Iran relations and the risk of a pullback in crude prices, the confluence of these dynamics suggests that the toluene market will follow a pattern of initial declines followed by a subsequent recovery.

Xylene: In June, the xylene market is expected to trade with mixed and slightly weaker momentum. Initial downward pressure from softer international oil prices will weigh on prices, though later, reduced operating rates at some units, tighter supply, and a temporary rebound in PX demand could lead to a brief price recovery. However, weak end‑use and blending‑fuel demand will limit upward momentum, pushing prices back into a weaker trend. With crude oil prices remaining volatile and fundamentals lacking supportive catalysts, the overall market is likely to remain subdued.

Source: China National Association of Food Additives and Ingredients Website

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