The market fluctuation of prebaked anode raw materials is mild, with a slight increase in costs and a stable price transition expected [SMM Weekly Review of Prebaked Anode]

SMM News on July 17:

Raw Material Side: This week, the petroleum coke market generally showed a trend of "steady shipments and localized price increases," with downstream enterprises' just-in-time restocking as the core support. Some refineries pushed prices higher due to improved petroleum coke specifications. Specifically, this week, the petroleum coke prices under CNOOC remained stable with a slight increase, rising by 30 yuan/mt, with current prices ranging from 3,550 to 3,600 yuan/mt. During the week, Taizhou Petrochemical resumed normal operations and conducted auctions for shipments. PetroChina's refineries in the northeast region saw stable orders from downstream enterprises. Additionally, Fushun Petrochemical is scheduled to halt operations for maintenance in late August, leading to a tighter supply of low-sulphur petroleum coke. After the price increase, petroleum coke prices in the northeast region remained stable this week, with current prices for low-sulphur petroleum coke ranging from 3,400 to 4,200 yuan/mt. Sinopec's refineries had good shipment performance for petroleum coke, with downstream anode material markets showing active purchasing. Coupled with the just-in-time demand support from the carbon industry, this drove a slight increase in petroleum coke prices, with increases ranging from 20 to 120 yuan/mt. Local refineries had moderate shipment performance, with petroleum coke prices undergoing minor adjustments during the week, with overall fluctuations within 100 yuan/mt. Some refineries saw improved specifications and increased petroleum coke prices. Overall, downstream enterprises' purchasing behavior has gradually returned to a rational just-in-time demand model. It is expected that subsequent market transactions will stabilize, and SMM predicts that petroleum coke prices will remain stable next week. According to SMM data, the average price of petroleum coke from local refineries was reported at 2,423 yuan/mt, up 3.77% MoM. The tender price of coal tar pitch, a raw material for coal tar pitch, increased slightly, providing cost support for coal tar pitch. Coupled with the pull back of operating rates of deep processing enterprises from highs, the supply of coal tar pitch tightened, and enterprises' willingness to raise prices increased. As of Thursday, the average price of coal tar pitch was 3,552 yuan/mt, up slightly by 1% MoM. Overall, the cost support for prebaked anodes remains relatively strong.

Supply Side: Prebaked anode enterprises continue to adopt a "produce based on sales" strategy. This week, the industry's operating rate remained stable, with no significant fluctuations in production schedules. Market supply maintained a dynamic balance, with no significant increases or decreases. On the demand side, with the southward shift of aluminum production capacity in Shandong and regional adjustments of electrolytic aluminum production capacity, overall production capacity operated smoothly.

Commentary: This week, the raw material market for prebaked anodes showed mild fluctuations overall. According to SMM data, as of July 17, the cost of prebaked anodes in China was approximately 4,770 yuan/mt, up slightly by 0.22% MoM. In early July, petroleum coke prices rose due to the release of staged procurement demand. However, after entering mid-month, as downstream enterprises' purchasing pace gradually returned to a "rational just-in-time demand" model, the price increase of petroleum coke slowed significantly. Currently, refineries' shipment pace remains stable, with robust performance in the two core downstream demand sectors: On the one hand, the anode material market continues to have sustained demand for petroleum coke due to the demand support from the new energy industry chain. On the other hand, the carbon used in aluminum production market, as the direct downstream of prebaked anodes, consistently provides basic support for the raw material market through just-in-time procurement. Overall, it is expected that the price of petroleum coke will mainly undergo a "consolidation transition" in the short term, with insufficient momentum for significant changes. Currently, the industry's operating rate remains high, and the supply from the production side is stable. Meanwhile, the downstream aluminum industry's demand is robust, with a steady pace of procurement for prebaked anodes. Against the backdrop of a stable raw material market and no significant disruptions on either the supply or demand side, the price of prebaked anodes is expected to continue its "stable transition" trend, with little likelihood of significant volatility in the short term. In the future, it is necessary to continuously monitor the supply and demand dynamics and price trends of prebaked anodes and their raw material markets.

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