Domestic and Overseas Demand Rises, Operating Rates Climb, Raw Material Prices Fall, Profit Improvement Emerges [SMM Analysis]

During the period from March 6 to April 7, SMM's prebaked anode prices continued their upward trend. The benchmark procurement price for a certain aluminum smelter in Shandong in April 2025 was 5,205 yuan/mt, up 2.74% MoM. According to SMM, the price adjustments for prebaked anode export orders in April showed slight divergence. Orders exported to Southeast Asia followed the domestic prebaked anode price adjustments, with increases concentrated around $20/mt. Orders exported to Europe, the US, and the Middle East followed the overall fluctuations in the domestic raw material market, with decreases concentrated around $20-50/mt. As of now, SMM's anode prices in east China closed at 5,205-8,594 yuan/mt.

Raw material side: During this period, petroleum coke prices continued to decline to low levels and then fluctuated. The low-sulphur petroleum coke market saw a gradual increase in downstream fear of high prices due to the rapid price increases earlier, leading to slower purchasing and weaker demand, causing low-sulphur petroleum coke prices to continue to fall. Entering April, with Jinxi Petrochemical and Daqing Petrochemical about to undergo maintenance, coupled with production cuts at Zhoushan Petrochemical and CNOOC Asphalt's planned maintenance within the month, supply-side reductions provided some support, turning the decline in low-sulphur petroleum coke prices into an increase. According to SMM statistics, as of now, the average price of low-sulphur petroleum coke in north-east China is about 4,292 yuan/mt, down 19.88% from March 6. During the period, local refinery petroleum coke prices continued to pull back due to poor downstream purchasing enthusiasm, with SMM's local refinery petroleum coke average price falling to a low of 2,367 yuan/mt on March 17, then entering a consolidation phase as downstream purchasing improved. According to SMM survey data, as of April 7, the average price of local refinery petroleum coke rose to 2,492 yuan/mt, down about 13% from March 6. In terms of coal tar pitch, prices fluctuated downward during the period. According to SMM data, as of April 7, the average price of coal tar pitch was 4,570 yuan/mt, down 2.18% from March 6. Overall, the cost-side support for prebaked anode enterprises has loosened significantly.

From a supply perspective, the operating conditions of domestic prebaked anode enterprises improved significantly in March 2025. Some enterprises in Henan and Shandong resumed production smoothly due to the relaxation of environmental protection policies and the commissioning of new capacity. Other enterprises in various regions also resumed production after completing maintenance, with a certain enterprise in Fujian further adding momentum. Although individual enterprises saw production declines due to maintenance, overall prebaked anode production still showed an upward trend. Coupled with three more production days in March compared to February, the production increase was more pronounced. According to SMM calculations, the industry's operating rate in March reached 76.73%, up 3.55 percentage points MoM, showing a positive development trend.

From a demand perspective, domestic aluminum operating capacity showed a growth trend in 2025, with operating capacity at the end of March about 43.88 million mt, expected to slightly increase to 43.92 million mt/year by the end of April. With the increase in aluminum capacity, the demand for prebaked anode will also increase accordingly. In addition, the resumption of production at aluminum smelters in Sichuan and Chongqing, the resumption of production at some aluminum smelters in Guangxi, and the start of production at the replacement and upgrade project of an aluminum smelter in Qinghai will all increase domestic prebaked anode demand. In 2025, the overseas aluminum market saw new capacity additions, and some enterprises resumed production, leading to an overall increase in prebaked anode demand. This drove the excellent performance of prebaked anode export orders in 2025, with export orders at the beginning of the year increasing by about one-third compared to the same period last year. The steady climb in operating capacity of domestic aluminum enterprises, coupled with the very optimistic overseas order situation in 2025, showed good performance in both domestic and overseas markets for prebaked anode.

Brief comment: During the period, a certain aluminum enterprise in Shandong adjusted the benchmark tender price for prebaked anode in April 2025, up 139 yuan/mt MoM. At the same time, another large prebaked anode sales company in China also raised its sales price for April, up 173 yuan/mt MoM. Notably, in terms of raw materials, both petroleum coke and coal tar pitch market conditions weakened. According to SMM calculations, as of April 7, the cost of prebaked anode in China was about 5,365 yuan/mt, down about 11% from March 6. With the increase in prebaked anode prices in April and the reduction in cost-side pressure, assuming January as the production cycle, SMM calculations show that the theoretical profit situation of prebaked anode this month improved significantly, with the loss amount down about 282 yuan/mt MoM, although it is still in the loss range, it has shown significant improvement. Currently, the number of enterprises undergoing maintenance in refineries is high, and there is still an expectation of supply-side reduction for petroleum coke. Although downstream purchasing sentiment improved after entering April, overall, just-in-time procurement remains the mainstay, and downstream demand provides weak support for the continued rise in petroleum coke prices. Based on this, it is expected that petroleum coke prices will mainly fluctuate in April. In view of this, SMM expects prebaked anode prices to remain stable next month. Subsequently, it is necessary to continue to closely monitor the operating dynamics of prebaked anode and downstream aluminum enterprises.