Petroleum Coke and Coal Tar Pitch Prices Weakened During the Week, Slightly Easing Prebaked Anode Cost Pressure [SMM Prebaked Anode Weekly Review]

SMM, December 26:

Raw Material Side: This week, refinery petroleum coke prices showed slight divergence. Low-sulphur petroleum coke prices remained relatively firm, with slight increases during the week, while medium- and high-sulphur petroleum coke prices turned weaker, with average sales performance. Specifically, petroleum coke prices at CNOOC refineries continued to rise this week, with adjustments ranging from 40-50 yuan/mt. PetroChina's petroleum coke prices in north-east China were largely stable, while the latest auction price of petroleum coke at Liaohe Petrochemical increased slightly by 40 yuan/mt to 3,290 yuan/mt during the week. As for Sinopec, refinery sales were stable during the week, with petroleum coke prices remaining largely unchanged. Additionally, SMM learned that Wuhan Petrochemical's 2.2 million mt/year delayed coking unit resumed operations on December 20. Local refineries saw a significant slowdown in sales, as downstream enterprises adopted a cautious and wait-and-see attitude with the month coming to an end. Petroleum coke prices at local refineries were mostly weaker. As of now, the average price of petroleum coke at local refineries is approximately 1,895 yuan/mt, down 3.61% WoW. In the coal tar pitch market, prices stabilized after adjustments during the week. As of Thursday, SMM data showed the average price of coal tar pitch was 3,618 yuan/mt, down 2.38% WoW. Overall, the cost side of prebaked anodes weakened this week, slightly reducing support for prebaked anode prices.

Supply Side: Temperatures in north China have recently started to drop, entering the heating season. Many regions experienced production restrictions due to environmental protection-related controls, particularly in Henan, Hebei, and Shandong, leading to an overall decline in supply. Additionally, it was reported that the environmental impact assessment document for Xinjiang Xipengduo New Material Co., Ltd.'s 200,000 mt/year anode carbon block project has been accepted. The project is expected to build a new production line with an annual capacity of 200,000 mt of anode carbon blocks, including key processes such as raw material storage, calcination workshops, green anode manufacturing workshops, and finished product storage. Future competition in the prebaked anode market is expected to intensify. Demand Side: Recently, pressure on the domestic aluminum supply side has eased slightly, with a minor decline in operating capacity. Some aluminum smelters in Sichuan and Guangxi reported capacity reductions due to technological transformation or losses. Demand for prebaked anodes has weakened.

Brief Analysis: Based on the current market situation, the weakening of petroleum coke and coal tar pitch prices during the week has alleviated cost pressure for producers to some extent. SMM data showed that as of December 26, the cost of prebaked anodes in China was 4,283 yuan/mt, down 0.8% WoW. In terms of supply, due to environmental restrictions during the heating season and enterprise maintenance, prebaked anode production in some regions has slightly decreased. However, overall market supply remains sufficient. On the demand side, although some aluminum smelters in Sichuan and Guangxi reduced production due to technological transformation or losses, negatively impacting prebaked anode demand to some extent, downstream demand overall remained robust. Future attention should focus on the production and operation of prebaked anodes and downstream aluminum enterprises.

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