Which Is the Next Bottleneck for Anode Production after Graphitization Capacity Expands?

SHANGHAI, Jun 28 (SMM) - With the intensive releasing of new graphitisation capacity this year, the supply tightness has been gradually easing, and it is expected that graphitisation will no longer be the bottleneck for the production of anode materials by 2023. Domestic graphitisation capacity stood at 860,000 mt as of the end of 2021, and has reached 1 million mt by now following the release of new capacities. The total graphitisation capacity is expected to reach 1.3 million mt with the commissioning of anode-graphitisation integration projects in the next six months. 

From the perspective of raw materials:

The demand for imported oil-based coke from high-end anode materials remains high, but domestic needle coke production capacity is still in surplus. Due to the late start of China's needle coke industry, nearly 30% of domestic needle coke supply relied on imports in the past. In recent years, along with the domestic technology progress and capacity expansion, the import dependence has dropped to 20%. However, due to the domestic oil-based needle coke process design, the performance of domestic products is lower than overseas, hence high-end anode materials still have to reply on imported oil-based coke. In terms of production capacity, in 2021, the domestic needle coke production capacity totalled 2.18 million mt, among which 1.18 million mt was oil-based needle coke and 1.0 million mt coal-based coke. Coupled with the disclosed expansion plans, it is expected that in 2022, the domestic oil-based needle coke production capacity will reach 1.32 million mt and the coal-based needle coke 1.18 million mt. In other words, there is a surplus of needle coke production capacity.

There is no expansion plans for low-sulphur petroleum coke for the moment, and the shortage of supply will gradually appear in the future. Due to the quality of crude oil, the sulphur content of imported petroleum coke is around 5%, while domestic petroleum coke products are better in terms of sulphur content and volatility, and have better electrochemical performance, which is favoured by anode manufacturers. On the supply side, domestic low-sulphur petroleum coke accounts for about 10% of the total petroleum coke. Due to the quality issue of crude oil, manufacturers that can produce low sulphur petroleum coke mainly include Daqing, Fushun and Jinxi, Dagang. Among them, coke produced by Daqing and contains less than 0.5% of sulphur and has the best quality. As petroleum coke is a by-product of smelting, there are no expansion plans in the market for the time being. In the future, with the rapid growth on the demand side and on the backdrop that medium sulphur petroleum coke technology has not achieved breakthrough, it is fair to day that the future bottleneck for anode production may be in the low sulphur petroleum coke.