SMM, July 16:
Raw material side: This week, China's petroleum coke market held up well overall, with prices consolidating on a firm note and a strong bullish sentiment prevailing. Prices of petroleum coke across all specifications rose broadly, with low-sulphur petroleum coke showing a particularly clear upward trend. On the refinery front, CNOOC's Binzhou, Taizhou, and Huizhou Petrochemical plants generally raised their prices, providing strong support to the market. PetroChina's low-sulphur petroleum coke in north-east China saw steadily rising prices due to low inventory and active just-in-time procurement from downstream enterprises. Prices at Sinopec's refineries were largely stable. Disruptions arose as typhoon-related impacts halted loading and unloading operations at Shandong ports during the week, obstructing the arrival and discharge of imported petroleum coke. Downstream enterprises were forced to turn to domestically produced coke, leading to a concentrated release of domestic substitution demand. This directly boosted trading activity for local refineries, driving transaction prices continuously higher. SMM's latest data showed that the north-east China 1# petroleum coke spot price index closed at 4,327.53 yuan/mt, up 0.88% WoW from last Thursday. The Shandong 2# petroleum coke spot price index closed at 4,190.07 yuan/mt (up 3.17% WoW from last Thursday), Shandong 3# petroleum coke spot price index at 3,767.26 yuan/mt (up 2.77% WoW from last Thursday), and Shandong 4# petroleum coke spot price index at 2,018.56 yuan/mt (up 8.06% WoW from last Thursday). As the typhoon impact faded, Shandong ports gradually resumed operations and expectations for imported supply replenishment strengthened, cooling trading sentiment in the domestic petroleum coke market. The spot market is expected to enter a consolidation phase in the near term. The coal tar pitch market consolidated on a subdued note this week. As of this Thursday, the average price of coal tar pitch was 4,868 yuan/mt, down 2.41% WoW from last Thursday. The price trend of coal tar, a raw material, weakened, and further downside room is expected in the near term. The operating rate at deep-processing enterprises continued to rise. Downstream prebaked anode operating rates fluctuated at highs, but buyers persistently pushed for lower prices, making only just-in-time procurement. Shipments of carbon black faced pressure, leaving raw material purchasing enthusiasm insufficient. The supply-demand pattern in the market is relatively loose, and the coal tar pitch market is expected to consolidate on a subdued note in the near term. Overall, cost support for prebaked anode remained relatively firm this week.
Supply side: Prebaked anode enterprises are maintaining a production pace of producing based on sales. New anode projects in Xinjiang, Guangxi and other regions are being commissioned successively, continuously releasing new capacity. Meanwhile, some enterprises saw their operating rates pull back slightly due to maintenance. However, overall, the industry's supply capability has steadily improved, further enhancing supply elasticity. Demand side: China's operating aluminum capacity stayed high, providing steady and rigid support for prebaked anode consumption. On the export front, new aluminum capacity in Indonesia continued to be commissioned, driving a MoM improvement in export orders for Chinese prebaked anodes to Southeast Asia. Geopolitical tensions in the Middle East have eased somewhat, and aluminum enterprises previously affected have begun to gradually resume production. This is expected to spur a recovery in anode procurement demand in the future. In summary, new supply of domestic prebaked anodes is being continuously realized, while high operating rates of downstream aluminum effectively underpin domestic demand. The export market is showing marginal improvement. Overall supply and demand for the industry remains stable, but as new capacity continues to be released, supply growth is slightly outpacing demand growth, leading to a more intense competitive landscape.
Summary: The raw material market trends for China's prebaked anode industry clearly diverged this week: petroleum coke prices provided relatively strong support, while the decline in coal tar pitch prices exerted a limited drag on costs, resulting in an overall rise in comprehensive anode production costs. According to SMM monitoring, as of July 16, the cost of China's prebaked anode was 5,567.91 yuan/mt, up 1.28% WoW from last Thursday. Looking ahead, the cost support from the petroleum coke market remains relatively strong, while coal tar pitch prices are expected to consolidate on a weak note. Overall raw material support is moderate. In terms of supply and demand, high operating rates in China's aluminum industry support demand, and export orders are improving marginally. However, with the continued release of new capacity, industry competition will become increasingly intense. The fundamental pattern of supply growth slightly outpacing demand growth is likely to persist. Going forward, close attention should be paid to changes in the supply-demand pattern and price trends for prebaked anode and its upstream raw materials.
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