Supply Tightening and Rigid Demand Support: Petroleum Coke Prices Consolidate at High Levels [SMM Analysis]

SMM, March 2:

In the petroleum coke market, due to the rapid price increase in the earlier period, petroleum coke prices reached high levels, leading to strong cost pressure and significant fear of high prices among downstream enterprises. This resulted in a sharp decline in purchase willingness and a noticeable slowdown in the purchasing pace. The shift in market sentiment directly caused a divergence in petroleum coke prices at refineries this week, with overall price levels continuing to decline.

Specifically, petroleum coke sales at CNOOC-affiliated refineries were moderate during the week, with prices steadily declining. The latest bidding prices were reduced by 0-220 yuan/mt, with current refinery prices ranging from 5,500-5,750 yuan/mt. PetroChina-affiliated refineries in north-east China, with low inventory levels, saw good sales performance, and petroleum coke prices remained largely stable during the week, with current quotes at 5,510-6,000 yuan/mt. Additionally, SMM learned that Liaohe Petrochemical maintained stable bidding for petroleum coke this week, with prices remaining at 5,800 yuan/mt. For Sinopec, downstream purchasing was active during the week, and refinery sales were moderate, with petroleum coke prices slightly increasing by 20-80 yuan/mt. Meanwhile, local refineries showed average sales performance, with petroleum coke prices continuing to weaken. As of this Friday, the average price of petroleum coke at local refineries was approximately 2,938 yuan/mt, down 6.11% WoW. Affected by domestic petroleum coke price fluctuations, especially changes in local refinery prices, port petroleum coke prices also gradually declined. However, imported petroleum coke sales remained relatively good, and port inventories continued to show a destocking trend.

On the supply side, another delayed coking unit at Qicheng Petrochemical began production this week, bringing some incremental supply to the market. However, newly added delayed coking units at Youtai and Xinyue entered shutdown and maintenance phases, which to some extent limited overall supply growth. Overall, the current petroleum coke supply remains tight. On the demand side, downstream enterprises showed a noticeable slowdown in buying sentiment, with purchasing strategies focused on maintaining just-in-time restocking, and no significant demand increase was observed. Nevertheless, the basic demand from downstream industries still provided some support to the market.

Despite current price fluctuations, the tight supply situation and rigid demand support, particularly the growth in demand from the new energy sector, will limit the downside room for prices. Unless there is a large-scale refinery restart or significant changes on the demand side, petroleum coke prices are expected to remain relatively stable amid fluctuations.