【Petroleum Coke】Entering the Cold Winter, When Will the Market Rebound?

In November, the calcined petroleum coke market, like the temperature entering winter, is plummeting with no signs of warming.

With the decline in the price of low-sulfur green coke, the price of low-sulfur calcined petroleum coke has also followed suit. After falling to a new low of 5130 RMB/ton in August, there was a rebound in August but resumed its downward trend after reaching 5630 RMB/ton, and there are no signs of recovery, continuing its decline.

Source: Oilchem

The profit of low-sulfur calcined petroleum coke is following the same trend as the coke price. From mid-September to October, there was a significant downward movement in the price of low-sulfur green coke, stabilizing briefly before another price adjustment in October. The market is calling for a reduction in the price of low-sulfur calcined petroleum coke, but the calcination of green coke takes time. In October, refineries were still calcining the relatively expensive raw material of green coke to relieve inventory pressure. Refineries had to reduce the price of calcined petroleum coke to ease inventory pressure, compressing profit margins to near breakeven levels.

Source: Oilchem

The situation of medium-sulfur calcined petroleum coke is similar to that of low-sulfur calcined petroleum coke. In April, the price of medium-sulfur calcined petroleum coke hit the lowest point in nearly three years. After a slow rebound, it experienced a sharp decline in September, reaching a new low of about 2000 RMB/ton.

Source: Oilchem

The profit situation of medium-sulfur calcined petroleum coke forms a different curve from the coke price because the price of medium-sulfur green coke continues to decline. The downward adjustment of calcined petroleum coke has not exceeded the level of green coke. Therefore, the profit of medium-sulfur calcined petroleum coke increased after ending the loss situation in May-June, following the decline in raw material prices. However, due to reduced downstream demand, refineries reduce coke prices for shipments, compressing profit margins. The profit of medium-sulfur calcined petroleum coke is now on the verge of profit or loss.

Source: Oilchem

Currently, there is a huge inventory of calcined petroleum coke in the market, but with reduced demand from downstream enterprises and aluminum smelters reducing production due to the "dry season," some aluminum smelters have average shipments. However, large inventories and reduced demand have led calcined petroleum coke manufacturers to either passively or actively start reducing production. In the Hebei region, calcined petroleum coke manufacturers are limiting production due to environmental protection policies. In Shandong, calcined petroleum coke manufacturers are reducing production voluntarily due to excessive inventory. In the Northeast, calcined petroleum coke manufacturers are reducing production due to reduced production by negative electrode enterprises and lower operating rates of graphite electrode manufacturers. Overall, calcined petroleum coke manufacturers are starting to build plants either passively or actively.

Future Forecast: With the current large downstream inventory and the approach of the year-end when enterprises recoup funds, demand for calcined petroleum coke is reduced, and purchases are primarily based on rigid demand. In the short term, it is difficult for calcined petroleum coke prices to rise. It is expected that in the coming period, the focus will be on digesting existing inventories, and coke prices will hover at low levels. Contact us to learn more information on the calcined petroleum coke market.