In June, prebaked anode prices lowered again

During the period from May 10 to June 11, SMM prebaked anode prices slightly declined. The benchmark purchasing price for a major aluminum smelter in Shandong in June 2024 was 3,918 yuan/mt, down 0.51% MoM. SMM learned that the prices of some prebaked anode export orders had no major change. As of June 11, SMM prebaked anode prices in East China were 3,918-6,440 yuan/mt, while north-west China prebaked anode prices were 4,368-4,708 yuan/mt.

During the period, the prices of petroleum coke were affected by weak downstream demand and moved rangebound. According to SMM data, the average price of private refineries' petroleum coke fluctuated between 1,600-1,700 yuan/mt during the period. According to SMM research, as of June 11, the average price of private refineries' petroleum coke was about 1,668 yuan/mt, down 1.3% from May 10. For coal tar pitch, prices fluctuated downward during the period. SMM learned that as of June 11, the average price of coal tar pitch recorded by SMM was 4,698 yuan/mt, down 11.41% from May 10. Overall, the cost side of prebaked anode slightly eased compared to the previous month.

From the perspective of supply, prebaked anode companies produced based on orders throughout the year. In May, the operating rates of domestic prebaked anode companies were relatively stable. A few enterprises resumed production and increased output after maintenance ended, while the rest maintained stable production. There was no major change on the supply, with stable operating rates being the main trend.

On the demand, in June 2024, the operating aluminum capacity in China mainly maintained an upward trend, mainly due to the steady recovery of power supply in Yunnan, the steady resumption of remaining capacity, and the expected continued commissioning of the third phase of the Inner Mongolia Huayun project. The prebaked anode industry continues to show positive demand domestically. Overall, the demand for prebaked anodes remains strong.

Brief comment: In June, an aluminum smelter in Shandong announced a benchmark price for prebaked anode tenders, which fell by 20 yuan/mt MoM. A large domestic prebaked anode sales company's June pricing fell by 65 yuan/mt MoM. During this cycle, prebaked anode prices slightly increased before falling again. The raw material petroleum coke market recently fluctuated, and coal tar pitch prices slightly declined, easing production pressure for companies. According to SMM’s estimates, as of June 11, the cost of prebaked anodes in China was around 3,884 yuan/mt, with a profit of about 34 yuan/mt. We need to pay attention on the operating rates of prebaked anode and downstream aluminum smelters.