China's anode material prices have been falling through 2023 and are yet to bottom. The manufacturers thus struggle to break even in the face of industrial overcapacity and downstream battery factories destocking.
It is expected that the anode material sector will see increasingly intensive competition in the fourth quarter, and the prices will remain low. That is, the already poor profits are projected to narrow further, especially for high-end artificial graphite.
Source: Mysteel
Looking back on 2023, the artificial graphite cost consists of 40% graphitization and 29% raw materials.
The fabrication charges of graphitization have been stable around Yuan 8,000-11,000/tonne, with Yuan 10,000/t being the mainstream. There have been few new orders entering Q4, as more and more anode material manufacturers are installed with in-house graphitization capacities, and downstream battery cell factories prioritize destocking. As such, the graphitization charges are close to the breakeven point.
Source: Mysteel
To tackle this dilemma, cost control is now increasingly prominent, including catalyst-powered graphitization (lower temperature), semi-continuous and continuous graphitization (less energy consumption), and afterheat re-utilization, in addition to seek lower power prices, lifting auxiliary materials utilization efficiency, reducing crucible consumption, among others. In addition, graphitization capacities with high cost will be phased out.
On the raw material end, the manufacturers try to reduce the cost by mixing natural and artificial graphite, using alternative lower-priced materials like ordinary petroleum coke and pitch coke. Recycling is also a highly concerned field to improve the manufacturers profitability.
Written by Aggie Hu, huchenying@mysteel.com
