Supported by strong gains in raw material prices within the settlement cycle, the prebaked anode prices have increased consecutively, breaking above the Yuan 6,000/tonne threshold for the first time in 44 months. In October 2026, a major Shandong-based aluminum smelter raised its benchmark purchase price for prebaked anodes by Yuan 400/tonne from September, settling at Yuan 6,130/tonne by cash and Yuan 6,147 /tonne by acceptance.
On the profitability front, using market prices in Shandong as the cost benchmark, the production cost of prebaked anodes during this settlement cycle stood at approximately Yuan 6,167.5/tonne. Compared with the benchmark purchase price in Shandong, the average industry profit was roughly Yuan -37.5 /tonne. Although anode prices rose as expected, the continuously rising cost base partly offset the gains from higher selling prices. While sector margins have seen some repair, the lingering effects of earlier losses mean overall profitability remained below the break-even line.
Within this settlement cycle, petroleum coke accounted for 66.70% of total raw material costs for prebaked anodes, while coal-tar pitch made up 19.97%. Driven by a sharp rally in coal-tar pitch prices, its cost share rose markedly, whereas the share of petroleum coke declined.
Petroleum coke
Trading sentiment in September was upbeat, with prices showing a mixed pattern of gains and losses. New refinery outages were added, yet most units resumed operation and several refineries adjusted capacity utilization rates, leading to a notable increase in petroleum coke output.
Low-sulfur coke shipments from refineries remained steady and prices extended their uptrend. The supply of high-sulfur general-grade cargo stayed tight, nudging general-grade prices slightly higher. The prices of standard-grade cargoes from independent refineries moved unevenly, rising or falling depending on refinery inventory levels.
During the settlement cycle, the average market price of 3A petroleum coke in Shandong was Yuan 3,743.4/tonne, up Yuan 49.8/tonne from the prior cycle; 3B coke averaged Yuan 3,610.5/tonne, down Yuan 27.6/tonne; and 3C coke averaged Yuan 3,305.2/tonne, up Yuan 231.4/tonne.
Coal-tar pitch
The average domestic price of coal-tar pitch in September surged. In the first half of the month, a tight supply-demand balance drove feedstock high-temperature coal tar prices sharply higher. Pressured by costs, deep-processing plants actively pushed up pitch prices, while key downstream buyers showed solid willingness to procure, lifting pitch values. From late September onward, deep processors faced cost pressure and began bargaining down on feedstock. Therefore, the high-temperature coal tar entered a downward channel.
As major downstream buyers cooled their purchasing interest, price suppression on coal-tar pitch intensified, and fresh-order prices trended lower. Nevertheless, the monthly average still rose substantially month-on-month. During the settlement cycle, the average price of modified pitch in Shandong was Yuan 7,244/tonne, up Yuan2,222/tonne from the prior cycle, and in Shanxi it averaged Yuan 7,148/tonne, up Yuan 2,167/tonne.
Overall, since October, petroleum coke trading has slowed, with transaction prices mixed: prices at major refineries have held steady, while those at independent refineries have mostly declined. Auction prices for high-temperature coal tar, the feedstock for coal-tar pitch, have adjusted narrowly, and cost-side bearish pressure has eased. Deep-processing plants are currently fulfilling contract shipments, with thin negotiation activity for fresh orders. According to Mysteel estimates, prebaked anode production costs have fallen by about Yuan 83.2/tonne from September levels as of now.
Outlook
Heading into late October, petroleum coke trading remains lackluster overall. However, uncertainty over navigation through the Strait of Hormuz persists, raising concerns about potential crude oil shortages and, tighter petroleum coke supply; prices are thus expected to remain volatile with an upward bias late in the month.
On the coal-tar pitch side, favorable factors for high-temperature coal tar have emerged frequently. Although upside room is capped, the market is likely to oscillate firmly. Cost support will underpin pitch values, and with downstream enterprises replenishing inventories as needed and demand holding stable, deep processors may raise quotations in step with feedstock gains in the near term.
As raw material prices pull back from earlier highs, prebaked anode production costs have edged lower, bringing temporary relief to producers. Looking ahead, raw material markets are expected to stay firm and range-bound at elevated levels in the near term, which could push anode production costs up again, though still noticeably below prior peaks. Downstream aluminum demand remains stable, and anode makers face no immediate pressure on order fulfillment.
With the northern heating season approaching, environmental-protection constraints are likely to prompt cuts in operating rates, pointing to weaker raw-material consumption ahead. Against this backdrop, most enterprises are managing raw-material inventories prudently and optimizing procurement timing to hedge against price swings and achieve cost reduction and efficiency gains.
Written by Regina WANG
wangjiaqie@mysteel.com
