According to Chem. Analyst, the supply of carbon black in North America, especially in the United States, is mainly produced by China, but it also relies to a large extent on imports from Canada. U.S. regulations on greenhouse gases, which take effect in the first quarter of 2024, have led to massive imports of lower-priced Asian carbon black and the hoarding of raw collagen materials with higher greenhouse gas emissions, especially imported carbon black and rubber raw materials from China and India.

As Canadian carbon black suppliers offered more discounts on U.S. export contract prices in the first quarter, the price decline accelerated; as a result, the spot sales price of N220 for delivery from February to March 2024 fell from US$2050/ton to below US$1845/ton.

Oil production and inventories in the U.S. market also rebounded during this period, making refinery operations stronger, except in February, when refinery production fell and prices of raw materials used to make carbon black soared on the spot market. Throughout the first quarter, West Texas (WTI) crude oil prices soared from US$79/barrel to US$84/barrel; carbon black N220 prices fell, in part due to the decline in oil and cracking residue prices, as refinery equipment operating rates and cracking furnace profits remained generally sluggish, and Canada's oversupply of carbon black feedstock persisted. Canada's export price of N220 rose to US$1945 per ton in February from US$1790 per ton due to supply disruptions at the Sweeny refinery in Texas and the cost of Mont. Belview) refinery is still suspended due to severe cold weather.

According to USMTA estimates, tire manufacturers 'demand for carbon black will be reduced by 2-3%. Michelin expects tire sales to decline in the first quarter, but their full-year forecast for the tire market remains unchanged, with tire sales expected to be flat or slightly lower than the previous year by the end of 2024. Michelin recently announced a 15% reduction in global tire production capacity, due in part to deteriorating profit margins and relatively weak sales results. The announcement further affects the carbon black N220 market as suppliers are currently realigning their strategies and planning to cut production and restore prices globally. Although this is expected to occur, production capacity of high-performance carbon blacks and specialty carbon blacks in Thailand and India is expanding. New greenhouse gas regulations in the United States are expected to curb its carbon black demand in China in the 2024-2025 fiscal year. As tire sales in the new car market fall by 2%, rising crude oil and oil prices after the first quarter are expected to push up raw material costs for U.S. carbon black production. It is expected that the price of N220 grade carbon black in the United States will rebound in the second quarter of 2024, which will curb the recovery of sales, especially the growth of imports from Canada.