In February (February 8 - March 11), the prices of prebaked anodes were generally stable. The benchmark purchase price of an aluminum smelter in Shandong in March 2024 was 3,878 yuan/mt, flat WoW. According to SMM, some export order prices for prebaked anodes picked up due to rising cost, but transaction prices were stable. As of Mar 11, SMM’s prebaked anode prices in east China closed at 3,878-6,380 yuan/mt, and prebaked anode prices in northwest China closed at 4,328-4,698 yuan/mt.
In the raw material market, petroleum coke prices continued to rise until around February 20, reaching the month's high, and then move rangebound. In March, petroleum coke prices mainly remained stable. The rise in petroleumcoke prices was mainly bolstered by the stocking of downstream companies after CNY. As prices rose to high levels, the sentiment of downstream companies in stocking weakened. In March, a new round of prebaked anode prices were released, and the production pressure increased. The petroleum coke inventory is moderate, most enterprises has remained inventory for about 7-15 days. Some enterprises in Shandong have sufficient stocks before CNY, which is expected to be used for more than a month. Some companies in the northwest have petroleum coke demand. The purchasing sentiment of prebaked anode companies for petroleum coke is moderate, and petroleumcoke prices moved rangbound. As of Mar 11, the average price of petroleum coke was about 1,775 yuan/mt, up 1.96% MoM. The coal pitch prices fluctuated upwards. The current mainstream transaction price is 5,500-5,700 yuan/mt. In some areas, coal pitch price has reached a high of 6,000 yuan/mt. As of March 11, SMM recorded the average price of 5,703 yuan/mt, up 11.57% from February 8. Overall, the cost support to prebaked anode prices was solid.
In terms of supply, prebaked anode companies produced mostly based on orders. New capacity was put into operation in Shandong, pushing up the output. However, there are fewer days in February and it includes the CNY, dragging down the operating rates. Overall, the operating rate in February was slightly stable. Prebaked anode production capacity continued to grow in 2024, mainly as production capacity expanded in the southwest and northwest China and some manufacturers in Shandong expanded capacity. Some companies in central China withdrew from the market due to insufficient profits and orders. At the same time, some backward production capacity may be phased out. It is expected that the production capacity will be around 30.8 million mt by the end of 2024.
Domestic aluminum smelters maintained stable operations in February, and most companies purchased prebaked anodes based on orders. The shortage of power supply in Yunnan has been alleviated, and some aluminum smelters may be granted with a small amount of power load for then to resume production. There may be a small amount of production resumption in Yunnan, but large-scale production resumption is unlikely to happen until rainy season. Companies reported that local aluminum smelters do not have a large amount of pre-baked anode, and are focusing on inventories at hand.
Petroleum coke prices may stabilise amid ample supply, while coal tar pitch prices may continue to rise. Prebaked anode producers are under enormous cost pressure. SMM will keep a close eye on the operating rates of prebaked anode producers and downstream aluminum smelters.
