Environmental probes, thin profits lower Mar operating rates across prebaked anode producers

SHANGHAI, Apr 4 (SMM) – Operating rates across Chinese manufacturers of prebaked anode for commercial use declined from a month ago in March, an SMM survey showed, as strict environmental probes after the two sessions forced a slew of producers that failed to meet emission standards to curtail production.

Operations across prebaked anode producers were also lowered by some producers’ output cuts for cost control as they were near, or even in negative territory.

The average operating rate across commercial used prebaked anode producers in China fell 3.07 percentage points from February to stand at 54.9% in March, according to SMM survey released on Thursday April 4.

Rates across medium-sized producers with annual capacity of 100,000-250,000 mt dropped 6.44 percentage points, and small, below 100,000-mt producers saw the rates fall 5.3 percentage points.  

Rates across large producers with annual capacity of 250,000 mt and above dipped 0.4 percentage point last month.

Prebaked anode producers in Zhengzhou that resumed in late-March have yet to swing into high gear, failing to provide a lift to overall operating rates.

The falling market is expected to prompt small and medium-sized prebaked anode producers to further slash production in April, which will extend declines in overall operating rates.

Weak prices of petroleum coke and slack demand from primary aluminium producers could provide little support to prices of prebaked anode.

Shandong Weiqiao Group earlier this week set its April benchmark purchasing price for prebaked anode at 3,030 yuan/mt in cash, down 150 yuan/mt from March. Excluding lower taxes, the decline came in at close to 70 yuan/mt.

Such a relatively sharp decline and strict quality inspection, SMM learned, have forced some carbon plants in Henan and Shandong to suspend or cut their anode supplies to Weiqiao.