Currently, the domestic coal tar pitch market is experiencing a strong upward trend. As of October 12, the mainstream price of coal tar pitch for aluminum production has risen to between 5,800 and 6,000 yuan per ton, an increase of 500 to 600 yuan per ton compared to early September. Since coal tar pitch accounts for the highest proportion of output in the deep-processing industry of coal tar, its robust performance has enabled the deep-processing sector to turn around from losses to profitability, significantly boosting industry profits. The primary raw material for coal tar pitch is high-temperature coal tar; its main downstream application is in the carbon industry. Therefore, we will analyze the reasons behind the recent rise in coal tar pitch prices and make a forecast for its future market trends from both upstream and downstream perspectives.

On the upstream side, the feedstock for high-temperature coal tar is coking coal. In September, due to a series of accidents at certain coal mines in Linfen, Shanxi Province, most coal mines were shut down for maintenance periods ranging from 7 to 40 days. In the Inner Mongolia region, the implementation plan for the 100-day intensive campaign for comprehensive environmental governance is being carried out, requiring rectification of coal mines identified as having issues and imposing restrictions on transport vehicles. As a result, the supply of coking coal continues to tighten. The gradual implementation of the dual-control policy on energy consumption, coupled with the increasing proportion of coal mines participating in ensuring supply, has further intensified expectations of tightening coking coal supplies. Meanwhile, the increase in imported resources remains limited. Adding to the resource scarcity, heavy rainfall following the National Day holiday caused damage to some road sections in Shanxi and Shaanxi provinces, disrupting transportation and leading to temporary shutdowns at several coal mines. Additionally, a mine earthquake occurred at a coal mine in Qitaihe, Heilongjiang Province. Combined with the ongoing tight supply of high-quality coal resources and the approaching winter stockpiling period for coal mines, these factors are supporting a relatively favorable trend in coking coal prices. Against this backdrop, during September and October, high-temperature coal tar prices showed an upward trend, with more price increases than decreases. Under production restrictions imposed on coke enterprises, the supply of coal tar has become limited, and sellers’ reluctance to sell has intensified, driving up prices. Meanwhile, the deep-processing enterprises of coal tar face persistently high production costs that remain difficult to reduce. 　　

On the supply side, September to November typically marks the peak period for traditional maintenance activities at enterprises. Around the National Day holiday, some enterprises either halt operations for maintenance or limit production, thereby reducing their operating rates. Additionally, floods in Shanxi and coal mine safety incidents in Northeast China have further depressed the operating rates of downstream processing facilities. Last week, the operating rate in the deep-processing sector for coal tar was only 48%, leading to a tightening of coal pitch supply.

On the downstream side, since the carbon and primary aluminum industries are high-energy-consuming sectors, under conditions of tight coal supplies and insufficient power capacity, these industries have faced significant restrictions on actual production starts. As a result, various provinces and cities have imposed varying degrees of power restrictions and production cuts. Although the National Reserve Bureau has released the fourth batch of reserved aluminum, copper, zinc, and other metals in the second half of this year—cumulatively releasing 280,000 tons of reserved aluminum—this has somewhat curbed the rapid rise in primary aluminum prices. Nevertheless, prices continue to trend upward at relatively high levels. Clearly, given the steady growth in both domestic and international demand, the supply gap in primary aluminum remains difficult to close. Industry insiders analyze that with raw materials in short supply and rising production costs, the world has yet to find a fundamental solution to ease the tight aluminum supply situation. A global supply shortage has become a widely recognized fact, yet profits in the primary aluminum industry remain relatively optimistic. This is also the main reason behind the sharp increase in pre-baked anode prices. According to reports, a major aluminum plant in Shandong has raised the benchmark bidding price for pre-baked anodes for October by 370 yuan/ton compared to September, bringing the cash price to 5,030 yuan/ton and the acceptance-price to 5,065 yuan/ton. As a result, demand for coal tar pitch has been supported, and downstream buyers have been actively purchasing, driving coal tar pitch prices to rise sharply.

Overall, both the upstream and downstream sectors of coal tar pitch are prone to price increases but find it difficult to fall, showing an upward trend. Raw materials are relatively tight, and the deep-processing industry for coal tar oil is operating below full capacity, leading to a tightening supply of coal tar pitch. This, in turn, has prompted downstream users with urgent needs to actively stock up, further fueling the bullish outlook for coal tar pitch prices. However, given the overheated rise in commodity prices, downstream manufacturers are facing severe payment delays from buyers, resulting in insufficient cash flow within the market and increasing the risk of high-priced transactions. Therefore, investors should be cautious about overheating in the market and carefully consider their financial situation before chasing price hikes.