Jiangxi Black Cat, China’s largest carbon black maker, posted an $8.6 million net loss in the first half of 2016, compared with a $6.1 million net profit in the first half of 2015.
Revenue over the same period declined by 22 percent to $292.9 million. With 1.06 million metric tons of carbon black annual capacity, the company produced 509,000 tons in first half 2016 and sold 505,000 tons.
Black Cat’s first half report said that in the first quarter, due to factors such as accelerated falling of global oil price, tire makers’ low capacity utilization and de-stocking activities, carbon black price dropped to a decade-low, putting the whole sector in the red.
In the second quarter, with oil prices bouncing back and coal tar prices increasing, and on account of government policies such as tightened environmental regulation, “smaller carbon black makers’ production shrank while large scale companies took over a bigger market share,” the report said.
China’s tire makers’ production started regaining momentum since April, leading to rise in carbon black demand, the report added, but overcapacity is still dragging down the bargaining power.
