SMM: Macro Fundamentals May Drive Up the Price Center of Petroleum Coke in 2025 [SMM Aluminum Industry Conference]

The combination of these factors has driven the price of low-sulphur petroleum coke from a decline to an increase. Especially by Q1 2025, the concentrated stockpiling during the Chinese New Year holiday, coupled with policy disruptions, amplified market expectations, pushing the price of low-sulphur petroleum coke to rise rapidly. In 2024, the prices of medium and high-sulphur petroleum coke mainly fluctuated, but after entering 2025, the prices surged quickly. SMM analysis: In 2024, the prices of medium and high-sulphur petroleum coke in Shandong experienced minor fluctuations. In Q1, the anode market improved, with active trading and enthusiastic procurement by downstream carbon enterprises, leading to a slight price increase. In Q2, increased refinery maintenance reduced supply, and just-in-time procurement supported a steady, slight price rise. However, as procurement sentiment cooled, prices showed a downward trend. In September, poor profitability at local refineries led to higher sulfur content in products, and some enterprises halted operations for maintenance, causing a shortage of medium-sulphur petroleum coke and a subsequent price increase. High-sulphur petroleum coke saw a slight price increase in Q1 driven by market sentiment, followed by a fluctuating downward trend. Entering 2025, due to increased raw material costs for refineries, some refineries, especially those in Shandong, reduced production. Combined with the concentrated stockpiling by downstream prebaked anode enterprises during the Chinese New Year holiday, petroleum coke prices experienced explosive growth. The prices of calcined petroleum coke and prebaked anode also rose rapidly with the increase in raw material petroleum coke prices. By April, the procurement price of prebaked anode from benchmark enterprises had risen to 5,205 yuan/mt, a 29% increase from the beginning of the year. 2025 Petroleum Coke Price Forecast. Factors Influencing Petroleum Coke Prices in 2025. Macro and Policy Aspects. 1. Import Tariff Adjustments. Starting from January 2025, the import tariff rate for fuel oil increased from 1% to 3%, and the fuel oil consumption tax deduction ratio in Shandong was significantly reduced from full deduction to a range of 50-60%. From April 12, 2025, a 125% tariff was imposed on all imported goods originating from the US, raising the import tariff from 3% to 128%. 2. Energy Conservation and Carbon Reduction Policies. The "dual carbon" goals have driven environmental upgrades and tax standardization, increasing environmental and compliance requirements for local refineries. Shandong Province plans to reduce the crude oil processing capacity of the local refining industry from 130 million mt/year to around 90 million mt/year by 2025, a 30% reduction, by eliminating outdated capacity through consolidation. In 2024, multiple national departments required the elimination of atmospheric and vacuum distillation units with a capacity of 2 million mt/year or less, affecting over 20% of such units in Shandong. Fundamental Aspects. 3. Domestic Petroleum Coke Supply. In 2025, there are no plans for new delayed coking units domestically. Frequent shutdowns and maintenance of delayed coking units in refineries throughout the year, with a significant increase in maintenance losses from April to May, coupled with the impact of consumption tax on profit margins, have led to a decline in the capacity utilization rate of delayed coking. Considering the above, domestic petroleum coke supply is expected to decrease in 2025. 4. Petroleum Coke Import Situation. The US is the largest source of petroleum coke imports for China. The escalating import tariffs on US coke have significantly increased costs, and the total import volume of US petroleum coke is expected to decrease by 30-40%. Overall, petroleum coke imports in 2025 are expected to increase YoY, but the growth will be limited, and the tight supply situation of petroleum coke is unlikely to change. 5. Domestic Petroleum Coke Demand. The steady increase in demand from the aluminum industry provides stable support for petroleum coke demand. The rapidly growing demand in emerging fields such as anode materials and PV polysilicon in the new energy sector has become a significant driver of petroleum coke demand. However, demand in some traditional industries, such as glass, is shrinking, and demand in the silicon metal industry remains mediocre. The market demand structure for petroleum coke is continuously reshaping, with the proportion of new energy-related fields increasing. Macro fundamentals favor a rise in petroleum coke prices, and the price center of petroleum coke is expected to shift significantly upward in 2025. SMM analysis: Overall, the tight supply-demand situation for petroleum coke is unlikely to ease in the short term, and prices are likely to rise. From April, the expectation of import contraction, combined with the concentrated maintenance period for domestic refineries, has already led to an upward trend in prices. In the medium and long term, the limited new domestic petroleum coke capacity and the expected exit of local refining capacity will exacerbate the supply-demand imbalance, increasing reliance on imports. Import obstacles or cost increases will significantly drive up petroleum coke prices. However, the price trend also faces some uncertainties. If the macroeconomic situation recovers slowly, the recovery of end-use consumption demand by physical enterprises and industries may take longer, potentially limiting price increases. Changes in the coal market and related policies could also indirectly affect petroleum coke prices. 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