SMM News, March 20:
Prebaked anode is a core consumable in aluminum production. Approximately 0.45-0.5 mt of prebaked anode is consumed for every 1 mt of aluminum produced. Its supply-demand pattern, logistics, and transportation are closely tied to downstream aluminum capacity, while also being heavily affected by both the smooth operation of global shipping through key waterways and the supporting capacity of regional industry chains. Recently, the suspension of shipping through the Strait of Hormuz, coupled with successive production cuts by aluminum enterprises in the Middle East, directly disrupted the global trade pattern for prebaked anode and also had a certain impact on China's prebaked anode export business.
Shipping Through the Strait Obstructed: Limited Impact on China's Prebaked Anode Export Trade, While Aluminum Plants in the Middle East Face Pressure in Securing Supply
China is the world's largest producer and exporter of prebaked anode, and the Middle East is one of the core destinations for China's anode exports. In the past, most prebaked anodes exported from China to the Middle East needed to pass through the Strait of Hormuz to reach ports along the Persian Gulf coast. The suspension of shipping through the strait has caused route diversions and significantly extended transportation cycles, with some vessels stranded in nearby waters, pushing up ocean freight costs and aggravating port arrival delays. As China's prebaked anode exports to the Middle East are mostly priced on an FOB basis, shipping risks are mainly borne by overseas buyers, and the impact on the contract performance of domestic export enterprises is limited. However, it has directly intensified delays in raw material arrivals for Middle Eastern aluminum enterprises, risks of supply disruption, and rising overall procurement costs. In response to the pressure of securing raw material supply, aluminum enterprises in the Middle East are currently actively seeking alternative solutions, attempting to switch to purchasing through overseas ports and then transporting by land, in order to open up transportation channels for prebaked anode and related raw materials. However, due to constraints such as abnormally high land transportation costs, cumbersome cross-border customs clearance procedures, and insufficient cross-border logistics capacity, this model cannot yet be implemented on a large scale, and the bottleneck in regional raw material transportation has yet to be effectively eased.
Current Status of Self-Supplied Prebaked Anodes Among Middle East Aluminum Enterprises: Overall Self-Sufficiency Is Relatively High, but Structural Gaps Remain
Leveraging the advantage of low-cost natural gas energy, the Middle East has risen to become the world’s third-largest aluminum-producing region. In 2025, the region’s total aluminum capacity reached 6.92 million mt, with actual production of about 6.85 million mt, accounting for 9% of global aluminum ingot supply. It has become one of the core supply hubs for low-cost aluminum globally, with core capacity highly concentrated in six countries: the UAE, Bahrain, Saudi Arabia, Qatar, Iran, and Oman. After years of independent industry chain development, Middle East aluminum enterprises have achieved a relatively high self-sufficiency rate in prebaked anodes, a key consumable: the region’s overall self-sufficiency rate is about 77%, significantly higher than its alumina self-sufficiency level. Most leading aluminum enterprises have built supporting anode production lines to ensure stable supply of this key raw material. Despite the region’s relatively strong supporting capacity, structural gaps still exist in prebaked anodes, and its dependence on imports of prebaked anodes from China remains at around 9%-10%, making China an important supplementary supplier to the Middle East anode market.
Overall, although the Middle East has a high anode self-sufficiency rate, it has not achieved a fully closed loop. Demand for high-quality anodes and emergency restocking still relies on imports from outside China, which also provides market space for China’s prebaked anode exports. More importantly, supported by the relatively high self-sufficiency rate in prebaked anodes, the core constraint currently facing Middle East aluminum enterprises is not a shortage of anode supply, but transportation bottlenecks for upstream raw materials such as alumina and the risk of fluctuations in energy supply. In the short term, prebaked anode supply will not become the core bottleneck restricting enterprise operating rates.
Escalating Energy Supply Crisis Outside China: Intensive Aluminum Production Cuts Outside China in March Put Temporary Pressure on China’s Prebaked Anode Exports to the Middle East
Since March, aluminum enterprises outside China had intensively announced production cuts due to energy and raw material supply issues. SMM summarized the developments at key enterprises as follows:
- According to Hydro’s official website on March 12, after Qatalum’s natural gas supplier confirmed that it would maintain a lower supply level, Qatalum decided not to implement further production curtailments and would maintain an operating rate of 60%. The production cuts were carried out safely and in a controlled manner, and with the operating rate maintained at 60%, future restart conditions had improved. It was not yet known when the restart would begin.
- According to Alba’s official website on March 15, Alba had initiated, in a controlled and safe manner, the shutdown procedure for aluminum production lines 1, 2, and 3, involving capacity equivalent to 19% of its total capacity of 1.623 million mt, with the aim of optimizing the use of Alba’s existing raw material inventory and prioritizing the operational stability of lines 4, 5, and 6.
- According to South32’s official website on March 16, it confirmed that Mozal Aluminium (Mozal) entered care and maintenance on March 15. Mozal had annual capacity of about 580,000 mt. South32’s CEO said that over the past six years, the company had engaged extensively with the Mozambican government, Eskom, and other stakeholders, but failed to secure sufficient and affordable power supply for Mozal beyond March. This shutdown would incur a one-off cost of about $60 million, followed by annual maintenance costs of about $5 million, while the alumina originally supplied to Mozal would be resold to third parties.
This round of energy supply crisis had already caused a substantive impact on aluminum operating rates in the Middle East and may place temporary pressure on China’s prebaked anode exports. China’s prebaked anode industry led the world in capacity scale. According to SMM statistics, by 2025, China’s total national capacity had expanded to more than 32 million mt, total industry production exceeded 23 million mt, and total exports approached 2.3 million mt. Backed by its capacity advantage, cost-performance advantage, and stable supply capability, China had become a major global supplier of prebaked anodes, and the Middle East was the core market for China’s anode exports. From the export structure perspective, China’s prebaked anode exports were mainly concentrated in two regions, Southeast Asia and Europe, while the Middle East and North America served as the backbone regions for China’s prebaked anode exports, with the remaining regions acting as supplements. Among them, the Middle East accounted for about 16 of China’s total anode exports. From the perspective of trade stickiness, Middle Eastern aluminum enterprises and China’s anode enterprises had already established long-term and stable cooperative relationships. The prebaked anodes exported by China met quality standards and had stable delivery cycles, enabling them to fill the gap in high-grade anodes within the Middle East. At the same time, when self-built anode capacity at Middle Eastern aluminum enterprises underwent maintenance or faced insufficient capacity, they played the role of emergency supplementary supply. In the Middle Eastern prebaked anode import market, China’s supply accounted for more than 40 and held an absolutely dominant position.
Outlook: Geopolitical Conflicts Reshape the Export Landscape, While Full-Year Exports Are Still Expected to Rise Steadily
Overall, shipping disruptions in the Strait of Hormuz combined with geopolitical conflicts in this round are expected to become the core variable reshaping the global export landscape for China’s prebaked anodes. As the conflicts continue to cause disruptions, production cuts at aluminum enterprises across many regions outside China have become frequent. Combined with unstable energy supply and periodic disruptions in the global logistics chain, overall demand for prebaked anodes in traditional core markets such as Europe and the Middle East has shown a downward trend. However, the Southeast Asian market has provided strong demand support by leveraging the advantage of concentrated industry chain deployment, especially as the concentrated commissioning and release of new aluminum projects in Indonesia have significantly boosted rigid regional demand growth for prebaked anodes.
Amid this structural adjustment in global regional demand, with gains in some markets offsetting declines in others, China’s prebaked anode exports can offset the pressure from weakening demand in traditional markets through market structure optimization and a shift in the center of orders. Coupled with its own capacity and supply chain advantages, China’s prebaked anode exports are expected to maintain a certain increase for the full year.
![Inventory fluctuated downward as increased warehouse withdrawals accelerated destocking, and recovering consumption drove processing fees back above parity [SMM Aluminum Billet Weekly Review]](https://imgqn.smm.cn/usercenter/LfGaw20251217171654.jpg)
![Impact of Hormuz Blockade on China's Aluminum Wire and Cable Exports to the Middle East [SMM Analysis]](https://imgqn.smm.cn/usercenter/zlIyw20251217171654.jpg)
