Prebaked Anode Costs Edge Up Slightly, Capacity Release Intensifies Industry Competition [SMM Prebaked Anode Weekly Review]

SMM, July 9:

Raw material side: This week, trading in China's petroleum coke market was lackluster. The low-sulphur coke market sentiment improved, with prices edging up; mid- and high-sulphur coke saw sluggish downstream procurement, causing prices to drift lower, and the overall market price center shifted slightly downward. Specifically, this week, transaction prices for petroleum coke at CNOOC's Binzhou refinery edged up, Taizhou Petrochemical resumed operations, and the Zhoushan Petrochemical unit remained shut down for maintenance. For PetroChina, low-sulphur coke prices in north-east China consolidated on a strong note, while petroleum coke prices at Sinopec's refineries were largely stable. Local refineries saw moderate shipments, and petroleum coke prices fell under pressure. The latest SMM data showed the spot price index for 1# petroleum coke in north-east China at 4,289.63 yuan/mt, up 0.28% WoW; the spot price index for 2# petroleum coke in Shandong at 4,040.29 yuan/mt, down 0.67% WoW; the spot price index for 3# petroleum coke in Shandong at 3,665.89 yuan/mt, down 0.26% WoW; and the spot price index for 4# petroleum coke in Shandong at 1,868.08 yuan/mt, down 2.14% WoW. Supply side, refineries' concentrated maintenance in July gradually wrapped up, driving production resumptions. Coupled with high port inventories, overall market supply was relatively ample. Demand side, rigid demand from carbon used in aluminum production formed a floor, while purchasing enthusiasm from anode material enterprises improved slightly. In the near term, the divergence across petroleum coke grades is expected to persist, with the overall price center consolidating and drifting lower. This week, the coal tar pitch market held up well. As of Thursday, the average coal tar pitch price stood at 4,988 yuan/mt, up 2.33% WoW. Coal tar prices remained high in a stalemate, and the operating rate at deep-processing enterprises edged up, leading to a slight increase in supply. Downstream anode enterprises focused on rigid restocking at the start of the month; sellers and buyers continued their standoff. Raw material cost support persisted, but the supply growth from higher deep-processing operating rates and downstream resistance to high prices were capping further price rises. In the near term, coal tar pitch prices are expected to consolidate at highs, with limited upward momentum. Overall, this week, cost support for prebaked anode remained relatively firm.

Supply side, prebaked anode enterprises maintained a production pace of producing based on sales. New anode projects in regions like Xinjiang and Guangxi gradually came online, continuing the release of new capacity. Meanwhile, operating rates at some enterprises pulled back slightly due to maintenance, but overall industry supply capability grew steadily, further enhancing supply elasticity. Demand side, China's operating aluminum capacity stayed high, providing stable, rigid support for prebaked anode consumption. Export orders, new aluminum projects in Indonesia continued to ramp up, driving a MoM improvement in anode export orders from China to South-east Asia. Geopolitical tensions in the Middle East eased somewhat, with previously affected aluminum enterprises gradually resuming production, which is expected to drive a recovery in anode procurement demand going forward. Overall, new domestic prebaked anode supply is being fulfilled consistently, high downstream aluminum operating rates effectively support domestic demand, and the export market showed marginal improvement. The industry's overall supply-demand balance remained steady, but with the continuous release of new capacity, supply growth slightly outpaced demand growth, intensifying the competitive landscape.

Brief: This week, China's prebaked anode raw material market diverged, with limited fluctuations in overall cost. According to SMM monitoring, as of July 9, China's prebaked anode cost was approximately 5,497.67 yuan/mt, up 0.68% WoW. Cost side, the petroleum coke market continued its structural divergence, while coal tar pitch prices consolidated on a strong note. Overall raw material side support was moderate, with coal tar pitch contributing strength and petroleum coke acting as a divergent drag. Supply and demand, high domestic aluminum operating rates supported demand, and export orders improved marginally. However, with the continuous release of new capacity, industry competition intensified, and the pattern of supply growth slightly outpacing demand is likely to persist. Future focus should remain on the pace of new capacity additions and the cost-side divergence between petroleum coke and coal tar pitch.