SHANGHAI, Jan 29 (SMM) – The fundamentals are set to change for the prebaked anode market in 2018 as it turns to oversupply following a year of surging prices, SMM believes.
In fact, we have started to see signs of such shift in January as prices fell, payment cycle extended and new capacity commissioned.
Prebaked anode prices in east China were down 150 yuan/mt this month from levels seen in December, according to SMM data. Prices in February are also set to drop by over 100 yuan/mt as supply of calcined coke became less tight.
In addition, we have seen aluminium smelters delay their payment for prebaked anode for up to a month or more. This showed sellers’willingness to increase delivery.
More captive capacity of prebaked anode by smelters also meant that the need to procure such material would continue to decrease.
According to SMM data, a total of 4.08 million mt of prebaked anode capacity will be added in 2018, while only 4.84 million mt of aluminium capacity would come online this year. This means some 1.71 million mt of prebaked anode capacity is more than what is required as it takes 0.49 mt of prebake anode to produce 1 mt of aluminium.
SMM believes other factors including the actual commissioning of the planned capacities and changes in environmental protection policies would also affect the prebaked anode market this year. But we see much better supply in 2018 and prices are set to drop from the 2017 levels.
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