Cost Side Remains Weak, Support for Prebaked Anode Loosens Significantly [SMM Weekly Review of Prebaked Anode]

SMM, May 8:

Raw material side: Recently, the petroleum coke market has shown a pattern of weak supply and demand. The combination of poor sales at refineries and a wait-and-see attitude among downstream buyers has driven prices to continue to decline. Specifically, this week, the prices of petroleum coke under CNOOC have fluctuated, with adjustments ranging from 20 to 150 yuan/mt. In the northeast region of China under PetroChina, downstream procurement enthusiasm has been insufficient, and refinery sales have been poor. This week, petroleum coke prices have generally fallen by 150 yuan/mt, with the current price range being 3,800-4,200 yuan/mt. Some petroleum coke prices under Sinopec have remained stable during the week. The sales situation of local refineries has been differentiated, with low-sulphur petroleum coke prices continuing to decline, while medium- and high-sulphur petroleum coke prices undergoing minor adjustments. According to SMM data, the average price of petroleum coke at local refineries is approximately 2,417 yuan/mt, a decrease of 2.78% from before the holiday.

In the coal tar pitch market, prices have stabilized this week. As of Thursday, the average price of coal tar pitch was 3,803 yuan/mt, unchanged from before the holiday. Overall, the cost side of prebaked anodes continues to loosen.

From the supply perspective, prebaked anode enterprises continue to adopt the business strategy of "produce based on sales," with production closely aligned with orders. This week, the industry's operating rate has remained stable, and there have been no significant fluctuations in enterprises' production schedules. The overall market supply has been maintained at a balanced level, without significant supply increases or decreases. On the demand side, with the southward shift of capacity in Shandong and the regional adjustment of aluminum capacity, the overall capacity has been operating smoothly.

Brief comment: Recently, the domestic prebaked anode market has shown a trend of simultaneous decline in costs and prices. The continuous decline in the price of petroleum coke, a core raw material, has become the key driving force behind the market downturn. According to SMM data, as of May 8, the cost of prebaked anodes in China has fallen to 4,994 yuan/mt, a decrease of 1.42% from before the holiday, significantly weakening the support from the raw material side. Overall, currently, many petroleum coke refineries are undergoing shutdowns for maintenance, providing a floor for petroleum coke prices. However, downstream enterprises generally maintain a wait-and-see attitude, with poor procurement enthusiasm, and petroleum coke prices still face significant downward pressure. SMM expects that in the short term, petroleum coke prices will continue the trend of being generally stable with slight fall, and the cost support for the prebaked anode market may remain weak. Continuous attention will be paid to the operation of the prebaked anode and raw material markets in the future.

》Click to view SMM's aluminum industry chain database