High Production Costs Drive Widespread Price Increases in Carbon Black

Staff Reporter Cao Qi

Starting March 15, the international carbon black giant Cabot China will raise the sales prices of all specialty carbon black products produced in China by 1,800 yuan per ton. This is the second price increase announcement from Cabot China this year.

Regarding the reasons for this series of price hikes, Cabot China clearly states that the main factor is the ongoing high production costs, which have made it difficult to maintain previous prices through internal cost absorption. Several industry insiders revealed that after the Spring Festival in 2026, the price of the core raw material for carbon black, coal tar, surged significantly, becoming a key factor driving up the costs for carbon black producers.

Multiple factors driving price increases

Entering 2026, the chemical raw material market experienced intense volatility. As a key raw material for industries such as rubber, plastics, and coatings, carbon black prices continued to rise, becoming a crucial variable disrupting the industry chain.

The pricing actions of international giants have become important indicators of this price increase trend. Since 2026, Cabot China has raised product prices twice, with these short-term, frequent adjustments highlighting the urgency of industry cost pressures and prompting domestic carbon black companies to follow suit, creating a chain reaction.

In fact, the recent rise in carbon black prices is not accidental but the result of multiple factors working together, primarily driven by costs, supply, and external environment. Cost increases are the primary driver, with the prices of core raw materials like coal tar and ethylene tar soaring significantly since the Spring Festival this year. Coal tar, which accounts for 70% to 80% of carbon black production costs, saw prices in main production areas increase by a total of 550 to 660 yuan per ton, directly boosting production costs.

Meanwhile, sustained high international oil prices further pushed up the prices of oil-based raw materials like ethylene tar, adding to the cost pressures faced by carbon black producers.

Supply-side contraction has also amplified the price increase effect. Continued tightening of environmental policies has forced some small and medium-sized carbon black producers to shut down or limit production due to non-compliance with environmental standards, accelerating the淘汰 of outdated capacity and significantly reducing market supply.

At the same time, to cope with rising costs, carbon black companies have invested heavily in upgrading environmental protection facilities and improving management processes. These additional environmental costs are ultimately passed on to product prices, further raising carbon black prices.

Additionally, the carbon black industry experienced long-term losses in Q4 2025, with companies eager to restore profits through price increases. Coupled with the demand rebound in the first quarter of 2026 due to downstream resumption of work and production, supply and demand tensions further intensified, supporting price increases.

Differing fortunes of upstream and downstream companies

The continuous rise in carbon black prices has quickly propagated through the entire industry chain, with upstream and downstream companies facing very different circumstances.

For carbon black producers, price hikes have somewhat alleviated cost pressures. Especially leading companies, leveraging scale, technology, and supply chain advantages, are better able to absorb cost fluctuations and even restore profits. However, for small and medium-sized carbon black companies, with weaker bargaining power for raw materials and higher environmental investment pressures, the benefits of price increases are limited, and they still face significant operational challenges.

Downstream industries are the main pressure points of this price increase wave. The rubber products industry, as the largest application sector for carbon black, is most directly affected. Rising carbon black prices directly increase production costs for tires, rubber seals, and other products, significantly compressing profit margins.

“In rubber product manufacturing, carbon black is a key additive, accounting for a significant portion of raw material costs. Since the Spring Festival, prices of commonly used rubber grades like N550 and N660 have surged sharply. Coupled with rising costs of natural rubber and other raw materials, as well as logistics costs, this has directly increased the rigid production costs for rubber companies,” said Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting.

Faced with ongoing cost pressures, rubber companies have had to raise product prices to ease operational stress. Since March this year, nearly 50 tire companies, including Zhongce, Linglong, and Sailun, have issued price increase notices.

Long-term cost pressures are forcing rubber companies to seek change, exploring breakthroughs through formula optimization and process improvements. Some companies reduce carbon black usage by 10% to 15% through surface modification technology or replace part of the raw materials with modified calcium carbonate and graphene-modified fillers to lower costs. Others increase R&D investment in high-end rubber products to enhance added value and offset raw material price increases.

“Looking ahead, the trend of carbon black prices will still be influenced by multiple factors. In the short term, cost-side support will remain, but the extent of increases may be constrained by downstream demand. The carbon black market is likely to show high-level fluctuations and gradually stabilize,” said an insider from a related industry company.