I. Domestic Market Prices for Graphite Materials

(A) Natural Spherical Graphite

• Natural Spherical Graphite (Particle Size: 15-20μm/Northeast) 12,500 RMB/ton

• Natural Spherical Graphite (Particle Size: 6-10μm/Northeast) 14,150 RMB/ton

(B) Graphite Anodes

• Natural Graphite Anodes (310-320mAh/g) 20,000 RMB/ton, Artificial Graphite Anodes (310-320mAh/g) Average Price 20,800 RMB/ton

• Natural Graphite Anodes (330-340mAh/g) 33,000 RMB/ton, Artificial Graphite Anodes (330-340mAh/g) Average Price 28,350 RMB/ton

• Natural Graphite Anodes (340-360mAh/g) 50,000 RMB/ton, Artificial Graphite Anodes (340-360mAh/g) Average Price 48,550 RMB/ton

Notes:

1. The above graphite material prices are inclusive of tax and weighed, excluding transportation and manual loading and unloading costs.

2. The above prices include packaging, with ton bags as standard; special requirements are subject to negotiation.

3. The mentioned qualities are the main indicators of graphite materials; for other indicators, please refer to national standards, and prices for other specifications with the same quality are negotiable.

4. Due to the instability of some resources, the above prices are for reference only.

II. Anode Material Market Analysis for June 2024

(A) Market Overview

In June, the anode material market remained stable with increased supply. A new integrated project in Yunnan began production, and several anode enterprises continued planning new and expanded projects. In the context of oversupply, market competition intensified. Due to slow technological updates and limited customer resources, many small and medium-sized enterprises focused on producing mid-to-low-end anode materials, leading to product homogeneity and continuous order competition. With downstream efforts to reduce costs, actual transaction prices for anode materials remained low.

(B) Market Analysis

Anode Material Prices

o The average price for lithium battery anode materials in June was 33,000 RMB/ton.

o High-end anode materials: 45,000-65,000 RMB/ton

o Mid-end anode materials: 23,000-31,000 RMB/ton

o Low-end anode materials: 15,000-20,000 RMB/ton

Raw Materials and Processing

o Raw Material Market:

• Low-Sulfur Petroleum Coke: Stable to slightly reduced prices; demand from the anode material market is decent, but pricing pressure from the new energy sector limits support for low-sulfur coke prices.

• Needle Coke: Stable market, with manufacturers fulfilling orders and minimal price fluctuations. Some companies in Shandong switched to producing petroleum coke, with an average operating rate of around 26%. The market inventory remains low. Needle coke, as a raw material, is widely used in the production of graphite electrodes for short-process electric arc furnace steelmaking.

o Graphitization Processing:

Stable market conditions; processing fees remain between 8,000-10,000 RMB/ton. As of June 25, 2024, processing fees for Acheson furnaces are 9,000-10,000 RMB/ton, box furnaces 7,500-8,500 RMB/ton, and internal string furnaces 12,500-13,500 RMB/ton.

Production

o June production of anode materials was 176,700 tons, a 6.64% increase month-on-month.

o Capacity utilization rate was 76.69%, a 3.29% rise month-on-month. Production and capacity utilization remained high, with major companies operating at full capacity and utilizing external processing.

Cost and Profit

o Production cost in June was approximately 20,892.8 RMB/ton, a slight decrease from May.

o Gross profit was around 5,819.16 RMB/ton, up by 3.37%. The slight reduction in raw material costs and stable processing fees contributed to higher profit margins.

(C) Market Forecast

• July Price Outlook: Expected to remain stable to slightly weak.

• Demand: Orders may decline slightly, with a trend towards stability and weakening.

• Cost: Continued pressure on low-sulfur petroleum coke and mid-temperature pitch prices, while needle coke prices remain stable, leading to overall cost reductions.

In summary, with insufficient cost support and potential declines in downstream demand, continuous order competition and downstream price pressure, July prices for anode materials are expected to remain stable but weak.

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