Under the Differentiated Pattern of Petroleum Coke, the Marginal Cost Support for Prebaked Anode Strengthens [SMM Weekly Review of Prebaked Anode]

SMM May 15 News:

Raw Material Side: Recently, the supply-demand pattern in the petroleum coke market has shown significant differentiation. The weak demand for low-sulphur petroleum coke has dragged down prices, while mid and high-sulphur petroleum coke has seen price recovery driven by restocking demand at low levels. Specifically, this week, prices of petroleum coke under CNOOC have mainly declined, with drops ranging from 70 to 270 yuan/mt. In the northeast region under PetroChina, refinery shipments have been relatively average during the week, and petroleum coke prices have remained stable, currently ranging from 3,650 to 3,950 yuan/mt. Some petroleum coke prices under Sinopec have remained stable during the week. For local refineries, as petroleum coke prices continued to fall to low levels earlier, downstream buying sentiment has improved, and refinery shipments have significantly picked up. This week, prices of mid and high-sulphur petroleum coke have turned from decline to increase. According to SMM data, the average price of petroleum coke at local refineries is approximately 2,434 yuan/mt, up 0.7% WoW. In the coal tar pitch market, prices have stabilized this week. As of Thursday, the average price of coal tar pitch is 3,770 yuan/mt, down 0.88% WoW. Overall, the cost support for prebaked anodes has slightly improved.

From the supply perspective, prebaked anode enterprises continue to adopt the business strategy of "produce based on sales," with production closely aligned with orders. This week, the industry's operating rate has remained stable, and there have been no significant fluctuations in enterprises' production schedules. Overall market supply has been maintained at a balanced level, without significant supply increases or decreases. On the demand side, with the southward shift of aluminum capacity in Shandong and regional adjustments in aluminum capacity, overall capacity has been operating smoothly.

Brief Commentary: This week, the raw material market for prebaked anodes has shown positive signals: prices of mid and high-sulphur petroleum coke have stopped falling and rebounded, and coal tar pitch prices have stabilized, providing support for the cost side of prebaked anodes. According to SMM data, as of May 15, the cost of prebaked anodes in China is approximately 5,022 yuan/mt, up 0.58% WoW, with slightly increased support from the raw material side. Overall, many petroleum coke refineries have halted operations for maintenance, providing a floor for prices. Coupled with increased enthusiasm from downstream enterprises to enter the market, SMM expects that in the short term, petroleum coke prices will mainly stabilize with slight upward exploration. With the recovery of the petroleum coke market, the cost support for the prebaked anode market has strengthened. In the future, it is necessary to continuously monitor changes in supply and demand and price trends in the prebaked anode and its raw material markets.

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