I. Core Viewpoint
The current ethylene tar market is in a tug-of-war between strong cost-side support and weak demand-side pressure. A significant increase in the ex-factory price of naphtha, combined with expectations of sustained high international crude oil prices, has markedly strengthened cost support for ethylene tar. However, on the demand side, negative factors are prominent: transaction prices for new orders in the downstream carbon black market have declined, and losses in the tire industry are suppressing operating rates. In the short term, the ethylene tar market is expected to exhibit a cost-driven, slightly bullish fluctuation pattern. Nevertheless, upside potential is constrained by downstream absorption capacity, making both upward and downward movements difficult to sustain.
II. Cost Side: Significant Increases in Crude Oil and Naphtha Provide Strong Support
(Image 1: Spot Price Trend of ESPO Crude Oil (Unit: CNY/ton))
According to data from Chempricehub, as of the 29th, Sinopec’s ex-factory price for naphtha in November 2026 is projected to adjust to 7,741 CNY/ton, an increase of 691 CNY/ton from the previous month, representing a rise of approximately 9.8%. As the core feedstock for ethylene cracking, the substantial price hike in naphtha directly elevates the central production cost benchmark for ethylene tar.
From the perspective of crude oil price transmission, WTI is expected to trade in the range of $97–$107 per barrel next week, while Brent is forecasted to move between $110 and $120 per barrel. Geopolitical risks—including fluctuations in transit flow through the Strait of Hormuz, low tanker traffic through the Bab el-Mandeb Strait, and ongoing Houthi attacks—continue to provide bottom support for oil prices. Consequently, cost pressures are unlikely to ease in the short term. The propagation of these high input costs to the pricing of ethylene cracking by-products confirms the clear cost-support logic for ethylene tar.
III. Supply Side: Pressure on Cracking Operations Limits By-Product Supply Growth
Against the backdrop of feedstock lightening, the supply of ethylene tar, as a cracking by-product, has generally decreased over most periods. Additionally, fuel oil market analysis indicates that environmental inspections and other factors have led to tight supplies of bunker fuel feedstocks and finished products, with wholesalers maintaining low inventory levels. This reflects a broader trend of tight supply in heavy oil products, indirectly corroborating the supply situation for ethylene tar. Overall, the supply side provides neutral-to-bullish support for ethylene tar prices.
IV. Demand Side: Weak Stability in Carbon Black, Losses in Tires, Limited Downstream Absorption; Coated Pitch Remains Stable
(Image 2: Domestic Carbon Black Price Trend Chart)
(Image 3: Domestic High-Temperature Coal Tar Price Trend Chart)
Carbon black is the primary downstream sector for ethylene tar. Currently, transaction prices for new orders in the carbon black market have declined. Input costs from coal tar show mixed trends with insufficient support, while the downstream tire market faces significant operational pressure and substantial losses, resulting in low enthusiasm for operations among industry participants. Procurement is primarily driven by rigid demand with flexible purchasing strategies. It is predicted that the carbon black market will maintain weak stability next week, with continued pressure on new order transactions.
Regarding high-temperature coal tar, the market is expected to remain weak at elevated levels in the next period. While coking enterprises are maintaining production restrictions leading to a slight decrease in output, the operating rates in downstream deep processing sectors are recovering, keeping rigid demand stable. Under this balance of bull and bear factors, prices are likely to fluctuate within a narrow range at high levels. For coated pitch, current orders are acceptable; however, reliance on a single downstream sector makes it difficult to sustain raw material prices.
In summary, downstream procurement of ethylene tar is predominantly based on rigid demand, creating suppression effects on any potential price increases for ethylene tar.
V. Related Product Linkage: Fuel Oil Fluctuates at High Levels, Creating a Warm Sentiment for Heavy Oil Products
(Image 4: Price Trend Chart of Crude Oil and Domestic Fuel Oil (CNY/ton, USD/barrel))
This week, the national average price for 180 CST fuel oil was 7,211 CNY/ton, up 182 CNY/ton (+2.59%) week-on-week. Rising crude oil prices have strongly increased blending costs for marine fuel, while environmental inspections have tightened supply, leading to strong push-up intentions among wholesalers. It is predicted that mainstream wholesale ex-warehouse transaction prices for 180 CST fuel oil nationwide will range between 7,200 and 7,400 CNY/ton in the next period, continuing to fluctuate at high levels.
As fuel oil and ethylene tar belong to the same category of heavy oil products, the high-level trading atmosphere of fuel oil provides some psychological support to the ethylene tar market. However, the demand side for fuel oil also faces constraints due to insufficient shipping cargo volumes and sluggish terminal refueling demand. The tug-of-war between high costs and weak demand in the fuel oil market is highly similar to the dynamics seen in the ethylene tar market.
VI. Market Outlook and Key Points to Watch
Comprehensive Judgment: With crude oil and naphtha prices remaining high in November, support for ethylene tar is significant. Combined with geopolitical premiums supporting international oil prices and weak cracking operating rates limiting by-product supply, the center of gravity for the short-term ethylene tar market is expected to be supported. However, weak stability in the carbon black market and losses in the tire industry suppress rigid demand, limiting upside potential. The market exhibits characteristics of a tug-of-war defined by "cost-driven increases versus demand-driven drag."
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