Introduction: On August 18, a high-temperature coal tar auction was held at Linhuan Coking in Huaibei, Anhui Province. The auction volume was 2,000 tons (ex-factory, cash, tax included), with a starting price of 4,000 yuan/ton and a final transaction price of 4,250 yuan/ton, up 175 yuan/ton from the starting price. As the first large-scale auction of the week, it opened and climbed significantly, with results exceeding prior market expectations. This effectively boosted bullish sentiment and served as a key catalyst for the upward trend in the high-temperature coal tar market this week. With substitute products strengthening and providing support, the ethylene tar market is gradually entering an upward trajectory.
I. Ethylene Tar Market Response
International crude oil and high-temperature coal tar prices rose in tandem, creating dual support from both cost and competitive product price comparisons. The previously anticipated downtrend in the ethylene tar market failed to materialize, and no downward momentum developed. Ethylene tar refiners have gradually strengthened their price-holding stance, and the market has entered a phase of energy accumulation, with suppliers probing opportunities to test price increases.
II. Homogeneous Product Market Response
The homogeneous product, high-temperature coal tar, rebounded sharply in Tuesday's auction. Since last week, the domestic high-temperature coal tar market had experienced significant declines, which stimulated buying interest from downstream plants. Underlying demand from downstream plants has not decreased notably; in fact, in-market demand has increased. Meanwhile, coal tar supply has continued to shrink due to intensified production restrictions at coking enterprises, exacerbating the supply-demand tightness in the market. This week, the market quickly returned to a rebound track, and as auction prices were released successively, calls for price increases in the market grew louder. Ultimately, coal tar prices rose substantially this week, with transaction prices in the Shanxi region hitting a new high for the year, followed closely by the Hebei region, while Shandong prices remained at a relatively low level. In the short term, the market is expected to maintain its upward momentum.
In the downstream carbon black sector, cost pressure is currently escalating too quickly, and new order quotes in the carbon black market have followed suit with increases, with quoted rises reaching as high as 500 yuan/ton. After market quotes moved higher, downstream inquiry activity in the market was active, but purchasing remained cautious, with transactions primarily consisting of small orders for immediate needs. Looking ahead, the raw material coal tar market is expected to maintain high-level operations, providing strong cost-side support. Combined with the upcoming downstream procurement pricing period, the carbon black market next week may show a high-level upward push.
Due to increased geopolitical risks, crude oil has rallied unilaterally, and sentiment in the slurry oil market continues to warm. However, downstream demand shows clear divergence, resulting in uneven price increases for slurry oil. Traditional deep-processing demand remains lackluster, with players cautious about purchasing at high levels, and upward pushes for high-sulfur slurry oil facing considerable resistance, with pricing mostly adjusting marginally within a stable range. Needle coke demand is supported by steady fundamentals, and the trading focus for medium- and low-sulfur slurry oil continues to show a notable upward trend. Cost-side support for residual oil is improving, refiners are increasingly inclined to hold back supply amid tight availability, and with major external-supply refiners reducing output and suspending releases, overall residual oil supply is tightening. Meanwhile, downstream coking demand has increased. Driven by positive news flow and favorable supply-demand dynamics, pricing focus for various grades of residual oil has generally moved higher this week.
Pitch-coated anode terminal demand continues to improve, new energy vehicle consumption has seen obvious recovery, and the power battery market is steadily advancing.
III. Summary
Driven by the strong performance of the high-temperature coal tar auction at Linhuan Coking early in the week, bullish sentiment in the coal chemical feedstock oil market spread rapidly, and the upward trend for ethylene tar has become a foregone conclusion. On the cost side, high crude oil prices provide underlying support, while substitute feedstock high-temperature coal tar prices are rising, opening the price comparison window. Downstream pitch-coated anode and carbon black enterprises are releasing rigid demand procurement, with some companies replenishing inventories. Refiners are selling smoothly with little inventory pressure and a strong willingness to hold prices firm. At the current stage, the market is driven by substitution effects and rigid demand resonance. Ethylene tar prices are expected to be raised in the coming days, with an estimated increase of 50–100 yuan/ton. However, it should be noted that the sustainability of this trend still depends on the pass-through capacity of downstream finished products. If feedstock prices continue to surge, downstream deep-processing margins will be progressively compressed, and resistance to high prices will gradually accumulate. In the later stage, vigilance is needed regarding the risk of weakening downstream acceptance.
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