[SMM Analysis] Raw Material Side Under Pressure and Pulled Back, Graphitisation Costs Rose Sharply, June Anode Material Costs Stayed High

In June, China's artificial graphite anode material market saw a clear divergence between raw materials and processing stages, with overall industry costs staying high. Specifically, on the raw material side, low-sulphur petroleum coke and needle coke products were affected by weak rigid demand follow-up from downstream anode enterprises, leaving overall buying sentiment subdued and strengthening buyer bargaining power. Meanwhile, coke producers that had undergone earlier maintenance gradually resumed production, loosening supply at the margin, which further suppressed the upward momentum of coke product prices and caused their market prices to pull back slightly during the month. However, given the high base of earlier pricing, the decline in raw material prices brought limited relief to end-use cost pressure.

In contrast to the weak adjustment on the raw material side, the graphitisation processing stage displayed tight supply and rising prices. Graphitisation lines with integrated supporting capacity remained stretched, while independent graphitisation processing enterprises saw their production profit margins shrink to a very narrow level. Against this backdrop, cost pressure was transmitted downstream, and processing enterprises showed a strong willingness to hold prices firm, driving a distinct uptrend in graphitisation processing fees in June. The slight decline in raw material prices and the rise in graphitisation processing fees offset each other, keeping the overall production cost of anode materials high and the industry's profitability under sustained pressure.

Entering July, as end-use demand from downstream NEV and energy storage sectors continues to release, integrated anode enterprises have been tightening their capacity further. With rising demand, purchasing and sales activities at anode material enterprises are becoming more active. Going forward, coke prices for anode raw materials and graphitisation processing fees are likely to be more likely to rise than fall, together forming the theoretical cost support system for artificial graphite anodes.