Lead: Following the outbreak of the US-Iran war, ethylene tar prices surged rapidly due to geopolitical tensions and the sharp rise in crude oil prices. Subsequently, as downstream demand remained persistently weak, prices have fallen back steadily. As of May 11, 2026, the mainstream price in East China stood at 3,300 yuan/ton, having returned to pre-war levels.

I. Fluctuations in the Crude Oil Market

Crude Oil Price Summary Table (Unit: 10,000 barrels/day)

Crude Oil Price Trend Chart (USD/barrel)

Major Crude Oil Cash Price and Spread Trend Chart (USD/barrel)

On the spot market, the US-Iran conflict directly drove the spot premiums and discounts for mainstream crude oil grades in March to rise in tandem with international oil prices. On March 31, Brent crude oil futures reached $118.35 per barrel, hitting the year's high. This represented a significant increase of $45.87 per barrel, or 63.29%, compared to February 28, when the conflict erupted. During the same period, taking ESPO as a representative grade, its premium surged by $18.50 per barrel. Entering May, the ESPO crude oil premium fell back to $5.5 per barrel, but it remained at a high level, still above the pre-conflict level of -$8.5 per barrel. The main reasons were: international crude oil prices remained high in March, pushing up the crude oil benchmark; simultaneously, refineries increased inquiries for grades like Russian oil, leading to a concentrated release of short-term procurement demand, which significantly boosted the ESPO crude oil premium. Additionally, the premiums for Middle Eastern grades, represented by Oman crude, rose markedly. From 2024 to 2025, its premium was stable in the 0-5 USD/barrel range. On March 3 this year, it rapidly rose to $12/barrel, and on April 3, it further touched a historical high of $35/barrel. Although it has fallen back somewhat subsequently, it remains at a relatively high level of around $13/barrel. Because Oman crude transportation does not require passing through the Strait of Hormuz, shipping and delivery risks are lower. Furthermore, its quality is suitable for domestic refinery processing techniques. Against the backdrop of disrupted crude oil exports from other Persian Gulf regions, Oman crude became one of the grades refineries turned to for alternative replenishment to hedge against geopolitical risks, thereby driving spot premiums higher. Coupled with the substantial increase in overall shipping freight costs on Middle East routes, this further pushed up the overall procurement cost for this grade.

National Independent Refinery Port Crude Oil Inventory Trend Chart (10,000 tons)

Table: Core Attributes of Main Crude Oil Arrivals at Shandong Ports, Jan-Apr 2026

At the beginning of 2026, crude oil inventory at national independent refinery ports was 18.47 million tons. As refineries stocked up from January to March, inventory continued to climb, consistent with the trend seen in the same period last year. It reached a phase high of 19.05 million tons on March 25, up 3.20% from the beginning of the year. The average port inventory from January to April was 18.01 million tons, a year-on-year increase of 38.53%, significantly higher than the same period last year. This was mainly due to routine procurement by refineries and phased inventory accumulation resulting from weak end-user demand. It also reflects the refineries' procurement strategy of locking in low-cost supply sources early to hedge against supply risks under high oil prices. Entering April, as international oil prices and spot premiums continued to rise, refineries' comprehensive calculation of raw material costs and weighing of profit margins resulted in significantly constrained transaction volumes at high prices. The sentiment on the raw material procurement side was generally cautious, with purchases mainly on a need-to-buy basis. Crude oil arrivals at ports decreased. With domestic refinery operating rates mostly stable, port inventory declined. As of April 29, national port crude oil inventory fell back to 17.97 million tons, down 5.70% from the March high, essentially returning to levels at the start of the year. This destocking pace aligns with the situation where refineries slowed down their procurement for April-May cargoes starting in March, primarily focusing on need-based transactions.

II. Ethylene Tar Market Response

Domestic Ethylene Tar Price Trend Chart

Previously impacted by the geopolitical conflict, ethylene tar prices surged sharply. Subsequently, as downstream demand remained persistently sluggish, the market entered a correction channel. As of May 12, 2026, prices had fully retraced all gains made during the conflict period, returning to pre-war baseline levels.

III. Homogeneous Product Market Response

Domestic High-Temperature Coal Tar Price Trend Chart

For the homogeneous product, high-temperature coal tar: although the first auction in Anhui Linhuan saw relatively few transactions, subsequent auctions mainly failed to find buyers. As downstream carbon black factories' firm price sentiment waned and the market returned to rationality, the decline in coal tar prices is expected to widen this week. Despite a recent uptick in downstream operating rates, the overall product performance remains weak. Therefore, the market downtrend is expected to continue in the short term.

Domestic Carbon Black Price Trend Chart

The domestic carbon black N330 acceptance-delivered price settled at 7,100 yuan/ton. Downstream resistance sentiment is evident, and negotiations are ongoing between upstream and downstream players. After the sharp decline in new order prices for the raw material coal tar market, the bearish impact on the carbon black market has strengthened. Downstream players are adopting a wait-and-see stance, new order transactions in the market are slow, and some new order negotiations are being postponed. It is expected that new order prices in the carbon black market will continue to trend downwards.

Wholesale Price Trend for Domestic Bunker 180cst Fuel Oil by Region (yuan/ton)

To date, fluctuations in the domestic bunker fuel oil market have been significantly influenced by demand. The weekly average transaction price (inc. tax, ex-works) for 180cst in various regions ranged from 5,210 to 5,225 yuan/ton. The national average was 5,315 yuan/ton, down 35 yuan/ton week-on-week, representing a decrease of 0.65%. During this period, crude oil prices moved up. Domestic low-sulfur residue/asphalt prices edged higher. Blending costs still provided support. Some local resource supplies were constrained, leading to slight price increases in certain areas. However, in most regions, weak demand made it difficult to push transaction prices higher. Consequently, the national weekly average price declined slightly week-on-week.

Domestic Synthetic Graphite Anode Price Trend

Synthetic graphite anode material prices have remained stable since the beginning of 2026. The price negotiation game between mainstream manufacturers and downstream battery factories continues. Downward pressure on anode prices from the downstream market remains the dominant theme. Prices for synthetic graphite anodes have struggled to rise in tandem with raw material increases. Mainstream prices for mid-range products are 25,500-34,500 yuan/ton; mainstream prices for high-end power products are 31,500-36,500 yuan/ton; digital products are 45,000-65,000 yuan/ton; mainstream prices for low-end products are 19,500-25,500 yuan/ton. Meanwhile, demand for anode materials is improving: demand recovery in the power battery sector, rising battery installations for EVs and new energy vehicle production/sales, and continuously increasing orders from the energy storage market. However, the anode material market is facing a situation of increased output without increased revenue.

Production Profit for Mid-Range Synthetic Graphite Anode Materials (yuan/ton)

Looking at April, the production profit for mid-range synthetic graphite anodes was 773.32 yuan/ton, a decrease of 391.6 yuan/ton month-on-month, a decline of 33.62%, representing a gross margin of 2.71%. Within this, the market price for outsourced graphitization processing was 9,180 yuan/ton; the market price for needle coke (oil-based green coke) was 6,105 yuan/ton; the market price for low-sulfur petroleum coke was 4,402 yuan/ton; the price for medium-temperature pitch coatings was 7,000 yuan/ton. The production cost was 27,726.68 yuan/ton, an increase of 391 yuan/ton month-on-month. Under these circumstances, mainstream prices in the anode market have not yet been pushed up, leading to a decline in overall production profit. It is expected that in May, the theoretical production profit for mid-range synthetic graphite anodes will continue to decrease to a level of 150-200 yuan/ton. (Note: The production cycle for anode materials is approximately 40 days, so raw material prices used are the two-month average.)

IV. Summary

International crude oil remains at high levels, providing strong cost support for ethylene tar raw materials and limiting downside space in the near term. On the demand side, the transaction focus for carbon black remains persistently low with weak orders, leading to cautious procurement of ethylene tar. The weak trend for high-temperature coal tar remains difficult to reverse, dragging down the performance of similar products. Fuel oil, driven by crude oil, has seen its negotiation center steady with a slight increase, providing some positive support for ethylene tar. On the supply side, Sinopec-SK (Wuhan), Yangzi Petrochemical, Shenghong Refining & Chemical, and Hainan Refining & Chemical are entering maintenance periods recently, while the start-up of Gulei Petrochemical has been postponed. This will lead to tighter supply in the future. In the short term, influenced by demand and homogeneous products, the risk of a price decline for ethylene tar still exists, but the market trend will maintain range-bound fluctuations with narrowing volatility. In the medium term, cost support remains, downstream demand is unlikely to show significant improvement. Driven by maintenance expectations and market sentiment, bidding prices for ethylene tar have recently shown an uptick, but the room for rebound is limited, making significant moves in either direction unfavorable. In the long run, trends will depend on crude oil prices, changes in high-temperature coal tar, and the recovery of demand from downstream sectors like carbon black, pitch coatings, petroleum coke, and needle coke.