Upstream and downstream game intensifies, petroleum coke market decline spreads

Recently, with the petroleum coke price decline from Shandong local refineries, domestic petroleum coke price decline spread to the local refineries among whole country, and then the low sulfur petroleum coke market also showed signs of a sharp decline. Since the beginning of June, except for the Northwest region, the prices of various types of petroleum coke in China have fallen to varying degrees. Petroleum coke as raw material,  graphite electrode widely applies for electric arc furnace steelmaking, available for spot order.

Since May, Shandong local refined petroleum coke price shock down. On the one hand, domestic petroleum coke price reached new highs in the second quarter. On the other hand, the downstream enterprises have great capital pressure and limited purchasing capacity. In addition, overhaul refineries resumed production one after another in May, easing the situation of tight market resources. More importantly, there is a turning point in the market, traders focus on dumping goods, intensified the supply of petroleum coke market resources. Under the psychological effect of “buy when the prices are going up instead of going down”, downstream plants purchase on demand, and traders wait for the opportunity. Factories and traders to slow down the pace of procurement at the same time, and the shipment of local refined petroleum coke is under pressure, inventory pressure is greatly increased. 

Recently, the local refined petroleum coke shipments have been generally, and the refinery inventory has basically maintained at the medium level or above. As of Thursday, the inventory of Shandong local refined petroleum coke has reached the second highest level since the last year, and the enterprises with high inventory are mainly medium and high sulfur petroleum coke producers. The market game is further intensified, and there is no sign of improvement in the local refined petroleum coke market.

However, in terms of demand, at present, the overall demand support of several major downstream industries of petroleum coke is not reduced. Although the price of electrolytic aluminum has dropped, aluminum plants still maintain considerable profit space; The anode material market is generally stable recently, however, with the improvement of the epidemic in Shanghai, anode material demand can still be expected. Therefore, at present, from the perspective of the domestic petroleum coke industry, the psychological game exceeds the contradiction of market supply and demand.

As a major country in global petroleum coke demand, China's petroleum coke resources are difficult to achieve self-sufficiency, and its import dependence has also shown an upward trend in recent years. Since 2021, China's petroleum coke import dependence has reached more than 30%.

According to the data of petroleum coke from 10 major imported petroleum coke terminals in China, the pace of petroleum coke from terminals has slowed down since late May. As of last Thursday, the shipment volume of petroleum coke at the terminal has been greatly reduced, and the inventory has risen sharply to more than 1.7 million tons. In the later stage, with the arrival of imported petroleum coke in June, the inventory of domestic petroleum coke at the terminal is expected to increase further. 

At present, affected by the sharp drop in the price of local refined petroleum coke in China, the spot petroleum coke price at some terminals is upside down. However, with the consumption of  petroleum coke market inventory, the local refined petroleum coke shipment will improve and the price will gradually rebound. In the case of demand unchanged, domestic petroleum coke demand gap will still appear in June. At that time, the shipment of imported petroleum coke as a resource supplement to the market will also increase, and the market will seek a new balance. However, it is worth paying attention to several types of petroleum coke with a large increase in import recently, such as the impact of a large number of Venezuelan petroleum coke arriving the port on the market of high sulfur general petroleum coke and the impact of Russian petroleum coke arriving in port on medium sulfur petroleum coke. Contact us for comprehensive carbon market news.