Cost Support for Prebaked Anode Weakens, Prices May Enter a Downward Trend [SMM Prebaked Anode Weekly Review]

SMM March 13 News:

Raw Material Side: In the petroleum coke market, the overall performance remained weak, with prices continuing to decline. Specifically, CNOOC-affiliated refineries significantly reduced petroleum coke prices WoW, with adjustments ranging from 700-1,150 yuan/mt. Current ex-factory prices are at 4,300-5,200 yuan/mt. PetroChina-affiliated refineries in north-east China adopted a price protection policy, with monthly settlement prices to be announced before March 24, 2025. This week, ex-factory prices were broadly reduced by 500-610 yuan/mt, now standing at 4,560-5,100 yuan/mt. Sinopec-affiliated petroleum coke prices remained largely stable. Local refineries also faced unfavorable conditions, with increased shipment pressure due to downstream enterprises' wait-and-see sentiment, leading to continued price declines. The current average price is approximately 2,498 yuan/mt, down 12.8% WoW. In the coal tar pitch market, prices were relatively stable. As of Thursday, the average price of coal tar pitch was 4,671 yuan/mt. Overall, the continuous decline in petroleum coke prices has weakened the cost support for prebaked anodes.

Supply side, prebaked anode enterprises maintained stable production throughout the year based on orders. Although some enterprises faced operational restrictions due to environmental protection policies and others experienced production declines due to equipment maintenance, overall supply remained relatively sufficient. Demand side, the operating capacity of the domestic aluminum industry steadily increased. Although the growth was limited, it positively supported the market demand for prebaked anodes.

Brief Comment: Recently, the downstream petroleum coke market has been dominated by a strong wait-and-see sentiment, and refinery shipments have been unsatisfactory, causing petroleum coke prices to continue their downward trend. In the short term, the lack of strong positive factors makes it unlikely for petroleum coke prices to reverse. Under such circumstances, the cost support for prebaked anodes has gradually weakened. According to SMM data, as of March 13, the cost of prebaked anodes in China had dropped to 5,580 yuan/mt, a decrease of 7.49% compared to last Thursday. Based on SMM surveys, although petroleum coke prices have softened, enterprises still face significant production pressure due to the consumption of previous inventories, resulting in poor profitability. This week, fluctuations in both supply and demand for prebaked anodes were minimal, while the petroleum coke market on the cost side remained sluggish, further weakening support for prebaked anode prices. SMM expects prebaked anode prices to enter a downward trend next month.

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