SMM Analysis: Production of Prebaked Anode Continued to Decline in January 2025, Rising Production Costs Expected to Drive Price Increase

SMM February 7 News: According to SMM's survey and calculations, China's prebaked anode production in January 2025 was 1.8672 million mt, down 4.74% YoY and 3.66% MoM. Among this, supporting prebaked anode production was 856,500 mt, and commercial prebaked anode production was 1.0107 million mt. In January 2025, the operating conditions of domestic prebaked anode enterprises continued to decline. Some enterprises faced operating restrictions due to environmental protection policies, while others experienced production decreases due to equipment maintenance. SMM calculated that the industry's operating rate in December was 74.65%, down 2.79 percentage points MoM.

Domestic demand side: By the end of January, SMM statistics showed that China's existing aluminum capacity was approximately 45.71 million mt, with operating capacity around 43.51 million mt. The industry's operating rate decreased by 0.04 percentage points MoM but increased by 2.29 percentage points YoY to 95.2%. Domestic aluminum smelters' operating capacity remained largely stable, with only a few smelters in Shanxi cutting production by 20,000 mt/year due to technological transformation. In December, the capacity reductions in Sichuan and Chongqing caused by losses had no production resumption plans. Entering February 2025, several aluminum smelters in Sichuan are expected to gradually resume production after the holiday, with domestic aluminum operating capacity anticipated to rise slowly.

Overseas demand side: In 2024, China's prebaked anode exports showed a significant growth trend. Although export volumes slightly declined in December, they remained at a high level. Notably, export orders to the UAE and Indonesia increased by over 100%, reflecting strong demand in these markets. Regarding export prices, influenced by a weak raw material market, the export price of prebaked anodes in 2024 remained largely stable with a slight decline, with an annual average price of $667/mt, down 24.6% compared to 2023. Looking ahead to 2025, feedback from enterprises indicates generally positive order conditions, suggesting steady growth in total exports. Considering the expected rise in raw material petroleum coke prices in 2025, export price centers are likely to gradually increase, which is a positive signal for the industry's development. Overall, despite challenges in the raw material market, China's prebaked anode exports performed well in 2024 and are expected to maintain growth momentum in 2025.

Brief Analysis: In January 2025, prebaked anode production continued to decline, mainly due to environmental factors in north China and production cuts caused by equipment maintenance in some enterprises. Although supply decreased during the month, prebaked anode enterprises produced according to orders, and overall industry supply remained relatively sufficient. On the demand side, entering February, the operating capacity of domestic aluminum smelters showed some recovery, slightly increasing demand for prebaked anodes. After the Chinese New Year holiday, the petroleum coke market for prebaked anode raw materials experienced another surge, coupled with the gradual rise in the coal tar pitch market, significantly increasing prebaked anode production costs and gradually intensifying production pressure. However, this cost increase trend also provides strong support for a potential price rise in prebaked anodes next month, with market prices likely to undergo a new round of adjustments.