Demand resilience stands out amidst dual decline in production; prebaked anode supply may rebound slightly in July [SMM analysis]

SMM News on July 4:

According to SMM survey estimates, China's prebaked anode production in June 2025 reached 1.9386 million mt, down 1.75% YoY and 1.23% MoM. Among this, the production of supporting prebaked anodes was 857,300 mt, while the production of commercial prebaked anodes was 1.0713 million mt.

In June 2025, the overall operating rate of domestic prebaked anode enterprises remained stable. From the perspective of capacity release, some enterprises resumed normal production after completing maintenance, leading to a rebound in production. A few enterprises upgraded their production processes through technological transformations, enhancing production efficiency and further driving production growth. The successful commissioning of the roasting process for new projects in south-west China significantly increased orders for prebaked anode green blocks in the region, concurrently boosting supply capability. Meanwhile, the industry also faced pressures for periodic adjustments. Affected by the transfer of aluminum enterprise capacity from Shandong to Yunnan, some local prebaked anode enterprises experienced a slight decline in production due to reduced supporting orders. In North China, stricter environmental protection inspections led to production constraints in individual enterprises, resulting in a temporary contraction in production. Additionally, June had one fewer production day compared to the previous month, which somewhat suppressed the industry's overall output. According to SMM data, the industry's operating rate in June was 75.84%, down 2.42 percentage points MoM.

Currently, the operating capacity of domestic aluminum enterprises continues to remain high. Due to capacity replacement policy constraints, aluminum enterprises in Shandong must complete production cuts at their original plants and pass inspections before initiating construction and commissioning of new plants. This requirement led to a slight MoM decline in the operating rate of the aluminum industry in June. Entering July, with the successful commissioning of the second batch of capacity replacement projects in Yunnan, the industry's operating rate has shown a rebound trend, and there are regional adjustments in the domestic demand for prebaked anodes. Regarding export orders, the overall performance of prebaked anode export orders in 2025 has been good, primarily due to the continuous release of new capacity in overseas aluminum markets and the gradual recovery of some enterprises' capacities. Based on current customs data, SMM estimates that China's cumulative export volume of prebaked anodes in 2025 reached 923,500 mt, up 9.08% YoY.

Considering the domestic and overseas market situations, the good performance of prebaked anode demand has laid a solid foundation for the industry to maintain a high operating rate. Based on current market dynamics, SMM predicts that the market supply of prebaked anodes in July will increase slightly.