Prebaked anode prices to halt decline on higher costs, heating-season output curbs

SHANGHAI, Oct 14 (SMM) – A rebound in prices of feedstock petroleum coke and production curbs in the upcoming heating season are expected to stem declines in prices of prebaked anode, a raw material in aluminium smelting, in the near term, SMM believes. 

However, we retain the view that the upside room of prebaked anode prices will be limited as most carbon producers have completed environmental rectifications, which will entitle them to less severe heating-season cutbacks.

Prices of petroleum coke stopped declines since late-September, while prices of coal pitch, another essential feedstock to produce prebaked anode, continued to hover at lows. 

SMM learned that Shandong Weiqiao Group, one of the top aluminium producers in China, lowered the benchmark purchasing price for prebaked anode for the fourth month in a row in October. This is set to drive other domestic aluminium smelters to follow suit. 

The October purchasing prices by Weiqiao stood 25 yuan/mt lower from that in September, at 2,900 yuan/mt in cash. 

Downstream demand for prebaked anode is unlikely to grow significantly in the fourth quarter as new, recovered capacity of primary aluminium will commission at a slow pace, according to an SMM survey. 

The lingering impact of accidents at aluminium smelters in Guangxi and Shandong provinces, together with elevated inventories at aluminium producers in south-west China, will also deter consumption of prebaked anode.