Driven by higher input costs within the settlement cycle, China's prebaked anode market moved up again. Shandong's large-sized smelters raised their September 2026 prebaked anode tender benchmark by Yuan 100/tonne to Yuan 5,730/tonne by cash and Yuan 5,745/tonne on acceptance bills.
On costs, using cash prices in Shandong as the basis, production cost for prebaked anodes in this settlement round came to about Yuan 5,821.19/tonne. That leaves the industry's average margin around Yuan -91.19/tonne. Although the tender price was bumped up, the increase lagged both market expectations and the faster rise in raw-material costs, pushing most producers back below the break-even line. Feedstock mix was little changed month on month. Petroleum coke (petcoke) accounted for 71.20% of pre-baked anode input costs, while coal tar pitch took 14.67%. Prices of the two moved in mixed directions.
Petroleum coke trading stayed upbeat in August with prices generally firmer. Output and operating rates rebounded, domestic supply remained ample, and port arrivals trailed dispatches, so port inventories kept drawing. Low-sulfur coke reported smooth shipment with some grades tight, keeping prices higher. The standard petcoke from independent refineries saw mixed moves depending on refinery inventories.
High-sulfur standard grade petcoke supply tightened further, with some lots also showing lower sulfur content, so high-sulfur coke prices moved higher overall. For this settlement round, Shandong 3A averaged Yuan 3,693.6/tonne, down Yuan 55.6/tonne from the previous round. Shandong 3B averaged Yuan 3,638.1/tonne, up Yuan 154.6/tonne. Shandong 3C averaged Yuan 3,073.8/tonne, up Yuan 91.0/tonne.
Coal tar pitch averages inched higher through August. High-temperature coal tar led the first-half rally on cost support, then eased mid-month. From late August, widening cokers' losses curbed operating rates, coal tar supply shrank while deep-processing demand stayed strong, and coal tar prices surged broadly to record single-week gains. Shandong modified pitch averaged Yuan 5,022/tonne, up Yuan 176/tonne. Shanxi modified pitch averaged Yuan 4,980 /tonne, up Yuan 200/tonne.
Into September, petcoke trading has stayed moderate. The state-owned refineries are pushing offers up at a steady pace, while independent refineries see middling shipment with done deals showing ups and downs in transaction prices. Coal tar pitch, meanwhile, is being bid sharply higher on tight and pricier high-temperature coal tar, plus upcoming autumn turnarounds that are cutting pitch supply. Mysteel estimates that prebaked anode production cost has risen another roughly Yuan 163.7/tonne so far in September.
Heading into late September, turnaround plants are clearly fewer, and domestic petcoke output could keep climbing. But with Middle East shipping through the straits still unresolved, supply risk lingers and crude still has room to firm, leaving petcoke cost support constructive. Buyers are pre-positioning inventories and restocking appetite stays firm, so petcoke prices look set to stay volatile and higher into the back end of the month.
On the pitch side, high-temperature coal tar posted last week its biggest single-week gain on record, with regional deal prices hitting all-time highs. Pitch followed those costs sharply higher, and some new orders are now quoted at Yuan 8,500-8,600/tonne. With the upcoming Mid-Autumn and National Day holiday drawing near, downstream restocking demand adds further near-term support, so pitch should hold firm at elevated levels.
Overall, consecutive gains in petcoke and pitch, layered on an anode tender benchmark that missed the market's mark, are squeezing anode margins hard from both sides. Looking ahead, feedstock prices should stay biased stronger near term, which points to further cost creep across the prebaked anode chain. Downstream smelter demand holds steady and anode makers face no immediate shipment pressure, yet the sharp raw-material swings will still test procurement timing and cash flow across the industry.
Written by Regina WANG
wangjiaqie@mysteel.com
