On September 21, Cabot announced that the company will increase the price of all rubber carbon black by US$150 per ton, equivalent to RMB 1,200, starting from October 1.
As for the reason for the price increase, Cabot explained that the cost of raw materials, employees and other aspects have increased, and the output is limited, which has led to the continuous increase in carbon black manufacturing costs.
In the domestic market, the cumulative increase in the domestic carbon black market price from early September to the 21st was 500-800 yuan/ton, and market transactions decreased after the company’s new orders rose. As of September 21, the price of carbon black N330 in Shandong market was 5200-5500 yuan/ton, an increase of 13.44% from the previous month.
RSS3 rubber price reached a ten-year high
In addition, due to the new crown pneumonia pandemic and limited market supply, the demand for protective rubber gloves has risen sharply, and the prospects for natural rubber prices are improving.
Luckchai Kittipol, the honorary president of the Thai Rubber Association, previously stated that he was more optimistic about the prospects of rubber because the price of RSS3 rubber reached 60 baht per kilogram for the first time in more than a decade on September 1.
In the third quarter of 2020, the natural rubber futures markets at home and abroad rose further, continuing the second quarter's rise. However, different futures markets and different rubber varieties have different growth rates. Among them, the futures prices of China All Latex, China No. 20 Gum, Singapore Tobacco Piece Gum, Singapore No. 20 Gum, and Japan Tobacco Piece Glue rose by 21.02%, 7.97%, 38.09%, 24.15% and 17.15% respectively. At the same time, the spot prices of various rubber varieties in China have fluctuated, with smoked sheet rubber performing the strongest, and mixed rubber performing the weakest. Since July 2020, the spot prices of smoked sheet rubber and full latex in Shanghai, and Thailand No. 20 standard rubber and mixed rubber in Qingdao Free Trade Zone have increased by 26.80%, 16.21%, 13.60% and 8.12% respectively.
Rising raw material prices may affect tire companies’ performance in the second half of the year
In recent times, the price of raw materials for tires has continued to rise, which has intensified the price increase of tires. So far, there are more than 20 tire companies including Magis, Pulin Chengshan, Triangle, Bridgestone, Linglong, Wanli, etc. Both have announced price increase plans.
In the first half of 2020, despite the adverse factors such as the pressure of the epidemic and the blocked exports, due to the decline in the prices of raw materials such as natural rubber, contrary to the sharp decline in the performance of foreign tire giants, the net profits of domestic tire companies have been rising. In the interview of Polyjiao Magazine, many companies even stated that their performance has reached the best in history.
In the second half of the year, as the prices of natural rubber, carbon black, steel cord and other raw materials continue to rise, the future performance of tire companies may be squeezed.