【Petroleum Coke】Can the Market Turn Around in September?

Supply: As of August 27, there were 14 ongoing routine maintenance operations at coking units across the country. This month, 7 new units have resumed or stopped operations respectively, with some refineries experiencing daily output fluctuations. The daily production of petroleum coke nationwide reached 87,225 tons, with a coking unit operating rate of 68.78%, an increase of 1.80% compared to the previous month.

Demand: In August, downstream demand remained generally weak. The operating load of carbon products for aluminum remained stable. While calcined coke prices held steady, sales were sluggish, leaving pre-baked anode manufacturers with limited profit margins, leading them to maintain only essential petroleum coke purchases. The anode materials market saw a decline in overall operating rates, with companies operating at 40-50% capacity, resulting in a significant decrease in both inquiries and orders, and subsequently, a noticeable reduction in petroleum coke procurement. The graphite electrode market operated at around 40.39%, showing little fluctuation from the previous month. Meanwhile, downstream steel mills continued to operate at low levels, and graphite electrode companies faced poor sales, making them cautious about purchasing petroleum coke. Additionally, glass manufacturers began reducing production, some silicon carbide companies suspended operations, and with coal prices continuing to decline, the demand for shot coke weakened. The price of silicon metal continued to decline, reducing the industry’s operating rate and putting pressure on the sales of petroleum coke by Taiwan Plastics.

Inventory: In August, downstream markets showed limited support for petroleum coke, with some refineries reducing prices to boost sales. Refinery petroleum coke inventories remained at medium to low levels. Although petroleum coke imports continued to decline, overall inventories slightly decreased as port sales slowed.

Market Outlook:

Supply: According to reports, 2 additional coking units are expected to undergo maintenance in September, reducing daily production by approximately 1,500 tons. Conversely, 6 new coking units are expected to come online, and one unit is scheduled to start production at the end of September, increasing daily output by about 4,100 tons. Overall, the supply of petroleum coke in the domestic market is expected to increase significantly in September. On the import side, weak demand and cautious buying attitudes among import traders are expected to further reduce the quantity of imported petroleum coke arriving at ports in September.

Demand: Downstream demand is expected to remain weak overall. Carbon product companies for aluminum are likely to maintain essential petroleum coke purchases. The anode materials market is expected to remain subdued, with companies operating at low levels and procuring petroleum coke only as needed. The silicon carbide industry and the southern fuel market will still require high-sulfur shot coke. The graphite electrode market is experiencing poor downstream demand, leading to limited new orders, with companies focusing on production control and reduction, making petroleum coke purchases cautiously. Silicon metal and glass fuel market conditions are deteriorating, with declining operations, leading to weakened petroleum coke demand.

In summary, domestic refinery coking unit operations are expected to increase in September, along with the gradual arrival of imported petroleum coke. The overall supply of petroleum coke is likely to remain abundant. While demand for aluminum use may perform decently, support from the steel sector remains weak, and anode material procurement is expected to be on an as-needed basis. Thus, petroleum coke prices in September are expected to remain steady, with potential minor increases in low-sulfur petroleum coke prices and slight decreases in medium-to-high sulfur petroleum coke prices, ranging from 10 to 150 yuan/ton. The main price range for petroleum coke is expected to be as follows: low-sulfur coke (around 0.5% sulfur) at 2,000-2,400 yuan/ton, medium-sulfur coke (sulfur below 2.5%) at 1,600-1,700 yuan/ton, and high-sulfur coke (around 5.0% sulfur) at 920-1,030 yuan/ton. Shot coke prices are expected to remain stable.

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