Affected by the weakening trend in the raw materials market, cost support for prebaked anodes weakened slightly in August, and anode prices declined again. According to Mysteel, a major aluminum producer in Shandong lowered its August procurement benchmark price for prebaked anodes by Yuan 53/tonne from July, setting the price at Yuan 5,630/tonne by cash and Yuan 5,645/tonne by acceptance.
Looking back on August, after a brief uptick, the domestic prebaked anode market turned downward again. During the settlement period, raw material prices for anodes, petroleum coke and coal tar pitch, moved mixed, driving a slight month-on-month fluctuation in the composite production cost. Although the overall change was modest, the anode market re-entered a downward channel, directly dragging down industry profit margins and putting some producers under losses.
Most prebaked anode enterprises maintained stable production and sales in August, while some plants completing maintenance began to restart operations, pushing the industry operating rate slightly higher. Prebaked anode supply remained ample. Incremental aluminum supply has largely been priced in; with the capacity cap in place, operating capacity has stabilized, and rigid demand for anodes held steady. Overall, the fundamental picture for prebaked anodes remained sound.
On the supply side, prebaked anode producers largely ran smoothly in August. Most commercial producers in major production regions executed orders as scheduled. Newly commissioned capacity gradually released output. A few enterprises carried out equipment maintenance, but the short duration meant no material impact on finished block output. Captive anode producers maintained stable output, mostly for self-consumption; output losses from maintenance at some plants were offset through inventory and external purchases.
Regarding new capacity, the environmental impact assessment report for a 170,000-tonne intelligent baking production line project in Shandong was approved in August; the calciner workshop of Xinjiang Chenfeng Carbon Green Energy-Saving Integrated Project officially entered the commissioning phase; and the 600,000-tonne high-end prebaked anode project in Xiwuzhumuqin Banner, Inner Mongolia, formally launched its risk assessment.
Overall, industry operating rates saw limited changes recently. The capacity utilization rates of domestic prebaked anodes in August averaged 76.49%, down 0.03 percentage points month-on-month. Despite some new capacity coming online, the total operating rate edged lower while overall output increased, keeping domestic prebaked anode supply stable.
On the demand side, domestic aluminum smelters maintained steady production in August, with healthy anode demand. Operating capacity held steady at high levels, with no significant changes from restarts, curtailments, or new capacity. Smelters' procurement and offtake rhythms remained normal, and overall anode demand was solid.
On the export front, data from the General Administration of Customs of the People's Republic of China (GACC) showed that China exported 211,700 tonnes of prebaked anodes in July 2026, up 12.18% year-on-year but down 24.40% month-on-month. Total exports retreated noticeably from June, shrinking by 68,300 tonnes. Destinations with notable drops included Canada and Malaysia, down 50,600 tonnes and 41,900 tonnes, respectively. Shipments to Indonesia and Bahrain posted partial gains, with Indonesia seeing a larger increase, but declines across other regions outweighed the gains, resulting in an overall month-on-month reduction in national prebaked anode exports.
On the cost side, domestic petroleum coke trading was active in August, with prices generally trending upward, though a few specifications in some regions posted slight declines.
In Northeast China, some low-sulfur coke grades were tight, and refineries sold smoothly, extending the price rally. Among independent refineries, some previously idled units restarted in August, increasing petroleum coke supply. Affected by the supply increase, prices of standard coke diverged among independent refineries. High-sulfur general-grade coke supply tightened, and sulfur content edged lower, driving prices higher.
By end-August, 3B petroleum coke in the Shandong market was priced at Yuan 3,620/tonne, up Yuan 40/tonne from July; 3C petroleum coke was at Yuan 3,200/tonne, up Yuan 150/tonne. In the East China market, 3B petroleum coke stood at Yuan 3,600/tonne, up Yuan 80/tonne from July.
In August, the average price of coal tar pitch edged higher overall. Early in the month, high-temperature coal tar prices rose, providing cost-side support and pushing pitch prices up in tandem. By mid-month, coal tar prices entered a downward channel, weighing on pitch, which adjusted lower. From late August, however, deepening losses at coking plants curtailed coal tar supply, while high operating rates at downstream coal-chemical deep-processing plants sustained strong demand for coal tar. Tight coal tar availability drove a sharp rally, and combined with higher capacity utilization at downstream plants providing solid demand support, pitch prices followed suit on the upside. By end-August, modified pitch prices were Yuan 5,470/tonne in Shandong, up Yuan 570/tonne from July, and Yuan 5,450/tonne in Shanxi, up Yuan 700/tonne.
In terms of raw materials, in September, operating rates of domestic delayed coking units are expected to rise slightly further, keeping total petroleum coke supply abundant. Downstream operating rates across demand sectors should remain stable. Trading is expected to soften slightly in early September, with prices facing mild downside pressure. However, as the Mid-Autumn Festival and National Day holidays approach, pre-holiday restocking sentiment may emerge, improving petroleum coke offtake and supporting a modest rebound in some coke prices.
In the short term, high-temperature coal tar supply is unlikely to increase meaningfully, and the tight, firm pricing pattern will persist, continuing to provide cost-side support for coal tar pitch. Meanwhile, alternating restarts and shutdowns at deep-processing plants will keep pitch output in check, limiting sellers' pressure. Downstream capacity utilization remains elevated, providing decent demand support. Coal tar pitch is expected to fluctuate at high levels in the near term.
On the supply and demand sides, most commercial anode producers are executing existing orders. Robust overseas demand has kept export-oriented plants running at high rates. As technical upgrade projects gradually resume across various regions, operating rates in Shandong, Gansu, and Inner Mongolia are expected to climb further. Combined with continued output releases from recently ignited projects, the sufficient domestic prebaked anode supply situation will persist in the near term. Aluminum smelters are running steadily at high capacity utilization rates, and overseas demand continues to drive export volumes higher. Domestic prebaked anode demand remains highly resilient.
In terms of pricing, during the settlement period, upstream raw materials trended firm-to-strong, and cost pressure transmitted smoothly, prompting another increase in quoted anode prices.
According to Mysteel, a major aluminum producer in Shandong has raised its September procurement benchmark price for prebaked anodes by Yuan 100/tonne from August, setting the price at Yuan 5,730/tonne by cash and Yuan 5,745/tonne by acceptance. Although the increase was in line with expectations, the magnitude fell short of market consensus. Coupled with raw material markets still in an upward channel, producers' cost pressures have resurfaced.
While strong downstream demand provides a floor and eases offtake to some extent, it is still difficult to fully offset the operational pressure from cost erosion on the raw material side. Going forward, continued attention should be paid to raw material price trends and their impact on prebaked anode producers' profitability.
Written by Regina WANG
wangjiaqie@mysteel.com
