SMM May 28 update:
This week, China's low-sulphur petroleum coke market weakened overall, with prices declining significantly, down over 6% WoW. In terms of market fundamentals, multiple domestic refineries were currently under maintenance shutdowns, leading to some contraction in spot supply. However, the supply contraction failed to effectively support the market. Previously sustained increases in petroleum coke raw material prices directly fueled rising wait-and-see sentiment among downstream enterprises, with raw material preferences gradually shifting toward mid and high-sulphur petroleum coke. Meanwhile, international Brent crude oil prices declined this period, weakening cost support. Overall, the combination of loosened cost support and strong wait-and-see sentiment among downstream purchasers jointly drove low-sulphur petroleum coke market prices to pull back and adjust.
This week, oil-based needle coke prices remained stable amid a tug-of-war. Demand side, end-user purchase willingness was subdued, with widespread efforts to push for lower prices, placing notable downward pressure on prices from the demand side. Supply side, some domestic needle coke producers successively entered facility maintenance cycles, resulting in some contraction in effective industry supply, which offset the bearish pressure from the demand side. With bullish and bearish factors counterbalancing each other, oil-based needle coke market prices maintained stable operations this period.
Market outlook: the petroleum coke maintenance cycle is expected to continue, and more needle coke producers are likely to enter maintenance subsequently, keeping overall market supply tight and providing sustained price support. However, downstream demand is expected to maintain a purchasing-as-needed mode due to cost pressures, making significant demand-side improvement unlikely. Under the dual weakness in supply and demand, if there are no significant fluctuations on the cost side going forward, upside and downside room for both petroleum coke and needle coke prices is expected to remain relatively limited in the short term.
SMM New Energy Research Team
Wang Cong 021-51666838
Ma Rui 021-51595780
Feng Disheng 021-51666714
Lyu Yanlin 021-20707875
Zhou Zhicheng 021-51666711
Zhang Haohan 021-51666752
Wang Zihan 021-51666914
Wang Jie 021-51595902
Xu Yang 021-51666760
Xu Mengqi 021-20707868
Hu Xuejie 021-20707858
