Prebaked Anode Prices Remain Stable Overall, Cost Support Weakens, Future Market Competition Intensifies [SMM Analysis]

SMM, December 27: This week, SMM prebaked anode prices remained largely stable, as the raw material market performed well during the month. Prebaked anode prices for January 2025 are expected to continue rising. As of December 27, SMM prebaked anode prices in east China closed at 3,747-6,140 yuan/mt, while prices in north-west China closed at 4,197-4,537 yuan/mt. Raw material side: This week, refinery petroleum coke prices showed slight divergence. Low-sulphur petroleum coke prices remained relatively firm, with a slight increase 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 remained largely stable, while Liaohe Petrochemical slightly raised its latest auction price by 40 yuan/mt to 3,290 yuan/mt during the week. For Sinopec, refinery shipments were stable during the week, with petroleum coke prices largely unchanged. Additionally, SMM learned that Wuhan Petrochemical's 2.2 million mt/year delayed coking unit resumed operations on December 20. Local refineries experienced a noticeable slowdown in shipments, as downstream enterprises adopted a cautious and wait-and-see attitude near month-end. Petroleum coke prices at local refineries generally weakened. As of now, the average price of petroleum coke at local refineries is approximately 1,885 yuan/mt, down 3.87% WoW. This week, the coal tar pitch market remained stable, with prices unchanged. Cost side, raw coal tar prices gradually bottomed out, alleviating the previously significant pressure and slightly easing market participants' nerves. Supply side, the operating load of deep-processing enterprises slightly declined, and supply remained sufficient, failing to provide strong support for prices. Demand side saw little change, remaining overall stable. Against the backdrop of relatively balanced supply and demand, the market entered a stalemate, with all parties awaiting new developments. According to SMM data, as of today, the average price of coal tar pitch was 3,618 yuan/mt, down 1.9% WoW. Overall, the cost side of prebaked anodes weakened this week, slightly reducing support for prebaked anode prices. In terms of supply, temperatures in north China are gradually dropping as the heating season begins. Environmental protection-related controls in many regions, especially in Henan, Hebei, and Shandong, have restricted enterprise production, leading to a reduction in overall supply. Additionally, Xinjiang Xipengduo New Material Co., Ltd.'s 200,000 mt/year anode carbon block project has entered the environmental assessment stage, with plans to build new production lines, including raw material storage, calcination workshops, green anode manufacturing workshops, and finished product warehouses, which will intensify future competition in the prebaked anode market. Demand side, domestic aluminum supply pressure has eased, with operating capacity slightly declining recently. Some aluminum smelters in Sichuan and Guangxi have undergone technological transformations or implemented production cuts due to losses, leading to a decrease in prebaked anode demand. Brief analysis: Based on the current market situation, the decline in petroleum coke and coal tar pitch prices has alleviated cost pressure for producers to some extent. SMM data shows that as of December 26, the cost of prebaked anodes in China was 4,283 yuan/mt, down 0.8% compared to last Thursday. In terms of supply, although environmental restrictions during the heating season and enterprise maintenance have slightly reduced prebaked anode production in some regions, overall market supply remains sufficient. Demand side, while production cuts at some aluminum smelters in Sichuan and Guangxi due to technological transformations or losses have negatively impacted prebaked anode demand, overall downstream demand remains robust. Future attention should focus on the production and operational dynamics of prebaked anodes and downstream aluminum enterprises.