Prices of prebaked anode to drop further on oversupply

SHANGHAI, Mar 21 (SMM) – Prices of prebaked anode will continue to tumble as supply grows after production restrictions are lifted at the end of the heating season, SMM believed. 

SMM sees downward room in prices, which have declined for three consecutive months. According to SMM, profit margins could be significant if current cash costs for prebaked anode are capped at around 3,500 yuan/mt. 

It is likely that accumulated inventories that began in January will continue to grow. A total of 4.08 million mt of new prebaked anode capacity was planned for 2018, compared to 4.01 million mt of new capacity for aluminium.

While some profitable large plants resumed production at full capacity as soon as restrictions were lifted, some plants with low profits only operated at 10-20% of capacity. Resumed capacity of prebaked anode sold externally also stood higher than captive capacity as many aluminium smelters postponed resuming operations given lower profits. 

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