[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 material and processing segments, with overall industry costs remaining at elevated levels. Specifically, on the raw material side, low-sulphur petroleum coke and needle coke products were impacted by sluggish demand from downstream anode enterprises, leading to generally weak buying sentiment and stronger bargaining power among buyers. Meanwhile, coke producers that had undergone maintenance earlier gradually resumed production, easing supply on the margin and further sapping upward momentum for coke product prices, which pulled back slightly during the month. However, given the high base of earlier prices, the drop in raw material costs provided only limited relief to end-user cost pressures.

In contrast to the weak consolidation in raw materials, the graphitisation processing segment exhibited tight supply and rising prices. Graphitisation production lines with integrated capacity remained persistently tight, while independent graphitisation processing enterprises faced razor-thin margins. Against this backdrop, cost pressures were passed down the chain, and processing enterprises showed a strong willingness to hold prices firm, driving a clear uptrend in graphitisation processing fees in June. The slight decline in raw material prices and rising graphitisation processing fees offset each other, keeping overall production costs for anode material high and continuously weighing on industry margins.

Entering July, as end-use demand from downstream NEVs and energy storage continues to be released, capacity at integrated anode enterprises has tightened further. With demand on the rise, purchasing and sales activities among anode material enterprises are becoming more active. Going forward, prices for anode raw material coke and graphitisation processing fees will likely be more prone to rise than fall, jointly underpinning the theoretical cost support structure for artificial graphite anodes.