The petroleum coke and coal tar pitch markets are weak, easing cost pressure on prebaked anodes, but prices may continue to weaken [SMM Weekly Review of Prebaked Anodes]

SMM, June 5:

Raw material side: In the petroleum coke market, the performance of refinery shipments was generally average after the holiday, with prices stabilizing or declining. Specifically, the prices of petroleum coke under CNOOC mainly declined this week, with drops concentrated at 100 yuan/mt, and the current price range is 3,200-3,300 yuan/mt. Binzhou Petrochemical is still under maintenance and has not provided a quote. The shipments of refineries under PetroChina in the north-east China region were stable during the week, with petroleum coke prices mainly declining, though a few refineries saw slight price increases. The current price range is 3,350-3,700 yuan/mt. It was also learned that petroleum coke prices in north-west China were stabilizing or declining, with adjustments within 300 yuan/mt. For Sinopec, the trading of petroleum coke at its refineries was generally average, with prices at some refineries continuing to fall during the week. Among local refineries, shipment performance varied, with downstream buyers purchasing as needed, leading to generally average market trading. Prices at some refineries stopped falling and saw slight increases, but overall, petroleum coke market prices remained relatively weak. According to SMM data, the average price of petroleum coke at local refineries was approximately 2,255 yuan/mt, down about 0.53% MoM. In the coal tar pitch market, prices declined this week. As of Thursday, the average price of coal tar pitch was 3,997 yuan/mt, down 1.96% MoM. Overall, the cost side of prebaked anodes continued to loosen.

From the supply perspective, prebaked anode producers continued the strategy of "produce based on sales." This week, the industry's operating rate remained stable, with no significant fluctuations in production schedules. Market supply maintained a dynamic balance, with no notable increases or decreases. On the demand side, with the southward shift of aluminum capacity in the Shandong region and regional adjustments in aluminum capacity, overall capacity operated steadily.

Brief comment: The raw material markets for prebaked anodes performed poorly this week. According to SMM data, as of June 5, the cost of prebaked anodes in China was approximately 4,665 yuan/mt, down 1.16% MoM, with the support from the raw material side continuing to loosen. The decline in costs effectively improved the profitability of enterprises, with most producers now profitable, though profit margins are limited, generally remaining at a slim level within 100-200 yuan/mt. From the perspective of market prices, prebaked anode prices in June generally showed a stable to slightly declining trend: The tender price of a large aluminum plant in Shandong remained stable MoM in June; a large domestic prebaked anode sales company lowered its sales prices, with a MoM decline of 142 yuan/mt. Currently, the industry's operating rate is high, and demand is performing well, with prebaked anode prices expected to remain stable in the short term. However, given the weak trend in the raw material market, which is unlikely to improve in the short term, prebaked anode prices may still show a weakening trend in Q3. In the future, it will be necessary to continuously monitor the changes in supply and demand and price trends in the prebaked anode and its raw material markets.

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