SHANGHAI, Feb 4 (SMM) — At the beginning of February, a large aluminium factory in Shandong raised the benchmark price for prebaked anode purchases in February. The spot exchange rate stood at 3,425 yuan/mt, the acceptance came in at 3,470 yuan/mt, and the month-on-month increase stood at 50 yuan/mt. The benchmark purchase price of aluminium plants rose eight times in a row, with a cumulative increase of 925 yuan/mt. In addition to the widening of the price difference between high and low-end prebaked anodes, average prices of the domestic prebaked anode market generally rose. The mainstream ex-factory prices of anodes were concentrated in 3,425-3,950 yuan/mt, and the average prices stood at 3,687 yuan/mt, up 32% year on year. Overseas order prices also have different degrees of increase, and FOB prices came in at $650-690/mt.
SMM data showed that total output of domestic prebaked anodes in January stood at about 1.68 million mt, and the industry average operating rates came in at about 74.8%, of which the commercial prebaked anode output in January was about 893,900 mt, with operating rates at about 74.1%. Supporting anodes output in January stood at about 786,300 mt, with operating rates at about 75.7%. Operating rates of domestic prebaked anodes in January decreased from December. The main reason was that prebaked anode companies in Hebei Province were basically in a simmering state in late January due to the pandemic, affecting some of the output. Recently, companies have reported that they have begun to resume work, but the production cycle of prebaked anodes was long, and the release of production needs to be by the end of February, and the overall supply will be reduced by more than 30,000 mt. Enterprises in Henan whose production were restricted by environmental protection in the early stages continued to increase production and resume work in early January, but the product supply did not increase significantly in January, and it is expected that the supply will only show an increase in mid-February.
Domestic primary aluminium market price fluctuated and corrected in January, but the monthly average price was still at a high level of 15,000 yuan/mt. The overall profitability of aluminium plants was slowly rising, and the demand for prebaked anodes remained unchanged. SMM expects domestic aluminium output to stand at 3.3 million mt in January (31 days). (For accurate data, please continue to pay attention to the data released by SMM later). The domestic aluminium demand for prebaked anodes was approximately 1.617 million mt in January. The demand for baked anodes is stable. It is estimated that prebaked anodes exports in January will be about 100,000 mt, and the apparent consumption will stand at 1.72 million mt. The overall supply of prebaked anodes in China will be short of 37,000 mt in January. This shortage may be better reflected in March as most aluminium plants have stockpiled before.
The prebaked anode industry has always had a weak voice in pricing due to overcapacity. Under the influence of continuous supply optimisation and environmental protection, the effective production capacity of the industry fell sharply compared to 2019, and the industry supply and demand will gradually reach balance. From the perspective of supply and demand, the domestic supply of prebaked anode market rebounded in February, but the overall increase was not large. The new domestic aluminium production capacity increased slowly, which was good for the prebaked anode market. In terms of cost, the raw material coke market fluctuated at a high level, and many companies in the petroleum coke market turned into maintenance in March. The petroleum coke market will continue its upward trend, with strong cost support. In summary, the prebaked anode market will continue to improve in the following weeks, and prices are likely to rise.