[SMM Analysis] Profit Margins Narrow, Graphitisation Prices Fluctuate Downward in October

SMM, November 19: In October, the average price of anode graphitisation was 9,033 yuan/mt, down 1.33% MoM. Although downstream demand remained strong in Q4, anode companies continued to increase their integration levels, reducing the need for outsourced graphitisation. Consequently, the outsourced graphitisation market remained weak. With the rainy season in south-west China coming to an end, electricity costs rose, further narrowing profit margins for tolling businesses, leading to a market stalemate. In terms of capacity, October's graphitisation capacity totaled 325,300 mt; November's graphitisation capacity is expected to total 328,000 mt. Looking ahead, anode production is expected to remain high in November, but this will not significantly boost outsourced demand. Additionally, many new anode companies are prioritizing the release of their own graphitisation capacity to take on tolling orders. Given the low demand and increased supply, the graphitisation market is unlikely to improve, and prices may continue to decline.