Profits of Listed Companies in carbon black industry fell sharply in the first quarter

The report of the first quarter of 2019 issued by four major carbon black listed companies in China shows that the net profit of the four companies has declined dramatically, even a huge quarterly loss of more than 74 million yuan.

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On March 30, Jiangxi Black Cat Carbon Black Co., Ltd. issued a performance forecast for the first quarter of 2019. The company expects net profit attributable to shareholders of Listed Companies in the first quarter to be between – 50 million yuan and – 80 million yuan. The profit for the same period last year was 134.836 million yuan.

According to Black Cat Carbon Black, the price of coal-coke black raw material oil was running at a high level from January to March this year. During the same period, affected by the decline in production and sales rate of automobile industry and negative expectations of trade frictions, tire companies’purchasing willingness declined, and the selling price of carbon black products continued to decline. The bad situation of “expensive raw materials and cheap products” had not been improved.

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According to the data of Jinneng Technologies, the company’s quarterly sales increased by 27.54% to 606,000 tons from January to March 2019, but sales revenue increased by only 1.30%, which was caused by the sharp fall in the price of carbon black products.

According to the data monitored by business associations, the price of domestic carbon black quoted 6,900 yuan/ton on April 29, with a small fluctuation and a price fluctuation range of 100-300 yuan/ton. This month, the volatility of carbon black market is mainly upward.

Since the fourth quarter of last year, the price of raw oil for carbon black production has fluctuated dramatically, resulting in a “passive price drop” of carbon black products, and the quarterly operating profit of enterprises has even been reduced to zero.

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Business analysts believe that the number of carbon black enterprises in China is large, overcapacity and decentralized, and competition is fierce. Because of the lack of concentration of production capacity, price rises may be taken away by other competitors. As the short-term has not been significantly positive, the market is expected to continue to operate at a low level.

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