SHANGHAI, Sep 29 (SMM) – Since September, domestic prices of commodities have been rising, and petroleum coke prices gained the largest increase by 30%. Low-sulphur petroleum coke prices broke through 4,000 yuan/mt in September, and the prices of medium-sulphur petroleum coke stood at 3000-4000 yuan/mt. The prices of high-sulphur petroleum coke stood at 2,500-3,300 yuan/mt in September.
The operating rate of coking units rebounded in September, but domestic supply remained tight, and the smelters had low stocks. Downstream users were actively restocking. In late September, some smelters reported that their crude oil quotas were insufficient, and their operating rates may be difficult to improve. In addition, the power rationing in many places in China has caused delayed coking unit operating in Jiangsu and other regions.
China imported 1.16 million mt of petroleum coke in August this year, and the cumulative import volume from January to August this year reached 8.68 million mt, a year-on-year increase of 19.%. However, according to SMM survey, overseas petroleum coke prices remain high. Domestic traders have reduced the amount of petroleum coke imports after October with the concerns about domestic prices. The petroleum coke imports in Q4 may drop sharply.
The aluminium prices fluctuated widely in September, and the spot prices was stood over 22,000 yuan/mt. However, as the costs of electricity, alumina and pre-baked anodes continued to rise, the profits for domestic aluminium shrank. The operating rates of aluminium plants fell significantly amid intensifying power rationing. Yunnan will reduce the aluminium output by nearly 500,000 mt/year, Liaoning will reduced production by nearly 50,000 mt/year, and West Inner Mongolia will reduce production by about 240,000 mt/year. A total of 790,000 mt/year of production will be reduced. The demand for petroleum coke by aluminium has declined. Only some prebaked anode companies need petroleum coke for the early production before the heating season, and the plants in north west China are stocking for winter. Graphite electrode and silicon metal companies have also reduced production due to the dual control and power rationing.
There is a possible decline in the demand side of the domestic petroleum coke market in the future. The domestic supply will remain stable in the short term, but the overseas imports supply will be insufficient in the later period. As of September 29, the petroleum coke prices have reached a high level, carbon companies have weak profits, and some companies have even suffered losses. However, due to the demand for restocking, companies still need to purchase on rigid demand. The purchase also declined due to the tight funds in the end of the month. The prices of pre-baked anode in early October may not be as high as expected, which will weaken the support to the petroleum coke prices. On the import side, due to the shipping cycle, the current prices of the port shipments are basically settled one and a half months ago, and the overseas prices of petroleum coke also increase in line with the domestic market, leading to the lower enthusiasm for imports. Therefore, the petroleum coke prices are expected to stand stable after the National Day holiday.