The raw material market was generally stable with slight rise during the week, and the short-term cost support strengthened, but it was difficult to offset the expected price pressure [SMM Weekly Review of Prebaked Anode]

SMM News on July 3:

Raw Material Side: This week, the petroleum coke market continued its upward trend, but the upward momentum significantly slowed down. The decline in downstream purchasing enthusiasm led to a slowdown in the refinery's shipping pace. Specifically, this week, the price of petroleum coke under CNOOC slightly declined, with an overall reduction of 50 yuan/mt to around 3,500 yuan/mt. Additionally, Binzhou Petrochemical was still under maintenance and had not provided a quote, while Taizhou Petrochemical began maintenance shutdown during the week. In Northeast China under PetroChina, due to moderate downstream orders and tight supply caused by refinery maintenance, the price of petroleum coke continued to rise in July, with increases ranging from 50 to 100 yuan/mt. The current price range is from 3,330 to 3,930 yuan/mt. For Sinopec, the trading of petroleum coke at its refineries remained moderate, with some refineries slightly pushing up their petroleum coke prices during the week, with increases within 100 yuan. Among local refineries, shipping performance varied during the week, with petroleum coke prices showing mixed performance. Overall, petroleum coke prices slightly increased. With the recent continuous rise in petroleum coke prices, downstream enterprises' buying sentiment significantly pulled back. SMM expects that petroleum coke prices will generally operate in a generally stable with slight fall manner next week. According to SMM data, the average price of petroleum coke at local refineries was reported at 2,327 yuan/mt, up slightly by 0.33% MoM. In the coal tar pitch market, the market operated steadily overall this week, with coal tar pitch prices showing a smooth transition. The weak decline in raw material coal tar oil prices dragged down coal tar pitch prices on the cost side. The operating load of deep-processing enterprises fell back from highs, and downstream enterprises' enthusiasm for purchasing was not high. Overall, coal tar pitch prices lacked upward momentum in the short term. As of Thursday, the average price of coal tar pitch was 3,612 yuan/mt, unchanged MoM. Overall, the cost support for prebaked anode is currently strong.​

Supply Side: Prebaked anode enterprises continue to adopt the "produce based on sales" strategy. This week, the industry's operating rate remained stable, with no significant fluctuations in production schedules. The market supply maintained a dynamic balance, without significant increases or decreases. Additionally, several prebaked anode projects commenced construction in the 2025 market, with some projects already in operation or entering the final stages. The overall operating situation was active, with new capacity continuously being released. For example, the successive implementation of large prebaked anode projects in Yunnan, Inner Mongolia, Xinjiang, and other regions further expanded the capacity base of the prebaked anode industry, increasing pressure on the supply side. It is expected that future market competition will become more intense. On the demand side, with the southward shift of capacity in Shandong and the regional adjustment of aluminum capacity, overall capacity operated steadily.

Brief Commentary: This week, the raw material market for prebaked anode continued its upward trend amid stability, with cost support continuing to strengthen. According to SMM data, as of July 3, the cost of prebaked anode in China was approximately 4,748 yuan/mt, up 0.47% MoM. From the perspective of market prices, prebaked anode prices are expected to decline in July: The tender price of a large aluminum plant in Shandong was adjusted downward by 190 yuan/mt MoM in July; a large domestic prebaked anode sales company also lowered its sales pricing, with a MoM decrease of 239 yuan/mt. Currently, the industry is operating at a high capacity, and demand is performing well, so prebaked anode prices are expected to remain stable in the short term. From the raw material side, although petroleum coke prices have risen recently, this round of price increases is mainly due to fluctuations in the purchasing pace of enterprises, and the actual downstream demand has not increased significantly. Based on comprehensive analysis, it is expected that the price center of petroleum coke will still show a downward trend in July, making it difficult to provide effective support for prebaked anode prices. In the future, it is necessary to continuously monitor the supply and demand changes and price trends in the prebaked anode and its raw material markets.

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