The demand for petroleum coke under the dual control policy in Yunnan may be reduced Ⅰ

In mid-August, the barometer of the completion of the double control target of energy consumption in various regions in the first half of 2021 released by the National Development and Reform Commission (NDRC) shows that the progress target of energy intensity reduction and the total energy consumption control target in Yunnan both lit up a first-level warning red light, and the double control situation of energy consumption in Yunnan is very severe, to get the high quality calcined petroleum coke.

On September 11, the Development and Reform Commission of Yunnan Province issued a Notice on The Double Control of Energy Consumption (hereinafter referred to as the Notice). Specific emission reduction policies are formulated for energy-intensive industries, including steel, cement, yellow phosphorus, green aluminum, industrial silicon and coal power.

“Double control notice” requires that on the basis of ensuring the completion of the target task of reducing crude steel output in 2021, adjust the production sequence of the province's iron and steel enterprises, and the production scheduling in September 2021 shall be adjusted (the adjustment proportion shall not be less than 30% of the monthly assessment target task); The cement output in September was reduced by 80% on the basis of the output in August; From September to December, the average monthly output of industrial silicon enterprises and yellow phosphorus production lines shall not be higher than 10% of the output in August (i.e., 90% output reduction); The average monthly output of green aluminum enterprises from September to December is not higher than that in August.

Yunnan Province is an important industrial silicon and hydropower aluminum production base in China. Under the background of double control of energy consumption, the output of industrial silicon and hydropower aluminum will be further reduced from September to December. Therefore, the overall consumption of petroleum coke in Yunnan from September to December will also be significantly reduced. Let's look at it in detail:

Electrolytic aluminum:

According to the requirements of the “Double control notice”, the average monthly output of electrolytic aluminum from September to December is not higher than that in August, the hope of resuming production of production capacity limited in the early stage will be dashed again, and the nearly 1 million tons of production capacity not put into operation will also be hopeless. In August, the output of electrolytic aluminum in Yunnan Province was about 240,000 tons, and it is expected that the output of electrolytic aluminum from September to December will be less than one million tons. It is speculated that the total consumption of petroleum coke involved in Yunnan electrolytic aluminum industry from September to December is about 500,000 tons, down about 16% month on month.

FigureⅠ Price trend of electrolytic aluminum and petroleum coke in 2021

Of course, not only Yunnan, but also Inner Mongolia, Guangxi, Xinjiang and other electrolytic aluminum industries have reduced production to varying degrees. In addition, Qinghai, Ningxia and Shaanxi have also successively issued power restriction warnings. From September to December, the domestic electrolytic aluminum industry will face further production reduction, which may further boost the aluminum price to a new high. However, in the later stage, with the decline of electrolytic aluminum capacity utilization, it is expected that the demand for petroleum coke for aluminum will also decrease significantly after the stocking period, to read  more petroleum coke news talk with us.

Industrial silicon (metallic silicon):

Figure Ⅱ Price trend of oxygen free metal silicon in Kunming in 2021