Heating season is coming, can petroleum coke market recover?

Recently, due to various factors, petroleum coke price has dropped significantly, and the market downturn has led to poor psychological performance of participants. In the important nodes of market changes, the heating season has become the focus of the industry in the next step. HP graphite electrode products take petroleum coke as raw material and are excellent materials for electric furnace steel smelting.

After two years of high level operation of petroleum coke, market participants may have been accustomed to the rising state of petroleum coke. Once there is a decline, some market participants will become more sensitive and their mentality fluctuates greatly. They pay special attention to the late trend of petroleum coke. The fluctuation of petroleum coke market mainly depends on the change of supply and demand fundamentals.

At present, the overall operating load fluctuation of Chinese refineries is limited. As Yongxin and other refineries begin to produce, the operating load of local refineries has increased, but the output will not change significantly. According to the survey, there is no major maintenance plan for the refinery, so the supply of petroleum coke is expected to be relatively stable.

From the output of petroleum coke in the heating period of the past five years, the output of petroleum coke in the heating period of 2019 is relatively small, and the output of petroleum coke in the rest of the year has exceeded 11 million tons. Due to the poor operation of the oil market in 2022, the output of petroleum coke is expected to decline compared with that of last year. Therefore, the supply of petroleum coke in the heating period of 2022 is expected to have a small growth trend.

From the perspective of electrolytic aluminum construction load, the construction load may decrease in varying degrees during the heating season. However, in general, the relevant policies of provinces and cities on the comprehensive treatment of air pollution in autumn and winter are mainly to implement differentiated management and control according to the performance of corresponding enterprises, and implement different production restrictions under different levels of weather warnings. However, in view of the great achievements made in the past two years, the atmospheric pollution diffusion conditions have improved significantly under normal circumstances, so even though there is still some uncertainty about the production limit scale of aluminum industry in the autumn and winter of 2021-2022, it can be concluded that the production limit scale should be small, and the overall impact on aluminum oxide and electrolytic aluminum production is relatively limited.

Recently, following the reduction of production in Sichuan, Yunnan has continued to reduce production, and the scale has a trend of further expansion in the later period. With the arrival of autumn and winter, the precipitation in Yunnan will further reduce and enter the traditional dry season. The water level of the reservoir is more worrying. In the context of tight water and electricity supply, the scale of power restriction and output reduction of electrolytic aluminum may be further expanded to 20% - 30% to ensure the stability of residential electricity and social electricity. Due to special factors, it seems difficult to find traces of the "Golden September and Silver October" peak season this year, before the National Day downstream enterprises stocking intention is not high, generally speaking, the demand support performance is general.

In conclusion, with the start of production of some refineries, petroleum coke supply will increase in the near future, but the domestic supply may remain stable before the heating season. In terms of demand, although the heating season has relatively limited impact on electrolytic aluminum, the output shows a downward trend due to the impact of electricity. At present, the northwest region has not started to stock up due to special factors. In the next stage, it is expected that the price of petroleum coke will still rise with downstream replenishment. For more information about petroleum coke and its related products, please contact us.