SMM, February 10:
During the January cycle (January 7 to February 7), SMM prebaked anode prices continued their upward trend. The February 2025 procurement benchmark price of a certain aluminum smelter in Shandong was 4,110 yuan/mt, up 2.11% MoM. According to SMM, February prebaked anode export order prices followed the rise in domestic raw material prices, with adjustments ranging from $12-40/mt. As of now, SMM's prebaked anode prices in east China closed at 4,110-6,550 yuan/mt.
Raw material side: During this cycle, petroleum coke prices experienced significant increases, particularly around the Chinese New Year holiday. The rise in the low-sulphur petroleum coke market was mainly driven by low refinery inventory levels in north-east China, combined with stockpiling demand from downstream enterprises before and after the holiday, leading to multiple price hikes. According to SMM statistics, as of now, the average price of low-sulphur petroleum coke in north-east China has reached 5,107 yuan/mt, a sharp increase of 53.68% from January 7. The rise in low-sulphur petroleum coke prices boosted overall market sentiment for petroleum coke. Coupled with supply reductions due to production cuts or suspensions at some refineries and sustained downstream demand, petroleum coke prices were further pushed upward, especially after the holiday, with local refinery petroleum coke prices seeing wide-ranging increases. According to SMM survey data, as of February 7, the average price of petroleum coke at local refineries rose to 2,442 yuan/mt, up 28.59% from January 7. For coal tar pitch, prices fluctuated upward during the cycle. According to SMM data, as of February 7, the average price of coal tar pitch was 3,838 yuan/mt, up 6.92% from January 7. Overall, the cost side pressure on prebaked anode enterprises increased significantly.
Supply side: In January 2025, the operating rate of domestic prebaked anode enterprises continued to decline. Some enterprises faced operating restrictions due to environmental protection policies, while others experienced production declines due to equipment maintenance. SMM estimated that the industry's operating rate in December was 74.65%, down 2.79 percentage points MoM. Overall, although the supply of prebaked anodes decreased, the overall supply remained relatively sufficient.
Demand side: By the end of January, SMM statistics showed that the existing capacity of domestic aluminum enterprises was approximately 45.71 million mt, with operating capacity around 43.51 million mt. The industry's operating rate decreased by 0.04 percentage points MoM but increased by 2.29 percentage points YoY to 95.2%. The operating capacity of domestic aluminum smelters remained largely stable, with only a few smelters in Shanxi cutting production by 20,000 mt/year due to technological transformation. The capacity reductions in Sichuan and Chongqing in December due to losses have no production resumption plans for now. Entering February 2025, several aluminum smelters in Sichuan are expected to gradually resume production after the holiday, with a slow increase in domestic aluminum operating capacity anticipated. The prebaked anode industry showed strong performance in terms of domestic demand.
Brief comment: During the cycle, a certain aluminum enterprise in Shandong adjusted its February 2025 prebaked anode tender benchmark price, up 85 yuan/mt MoM. Meanwhile, another major domestic prebaked anode sales company also raised its February sales price by 151 yuan/mt MoM. This price adjustment was driven by the significant rise in raw material petroleum coke prices and the gradual increase in coal tar pitch prices, leading to continuous cost increases for prebaked anodes. According to SMM calculations, as of February 7, the cost of prebaked anodes in China had reached approximately 4,956 yuan/mt. Although prebaked anode prices rose in February, the rising raw material prices have gradually increased production pressure on enterprises, resulting in less optimistic profitability. After the Chinese New Year holiday, the petroleum coke market also saw a new round of price increases driven by sellers and buyers. SMM expects that under such circumstances, prebaked anode prices may see a significant increase next month. Continuous attention should be paid to the operating conditions of prebaked anode and downstream aluminum enterprises.
