Understanding China's Prebaked Anode Market: Price Trends, Supply-Demand Dynamics, and Industry Outlook
With China's prebaked anode market experiencing significant fluctuations, current trends reveal complex pricing dynamics shaped by raw material costs, regional production shifts, and evolving global demand patterns. This comprehensive analysis examines the latest market developments and future outlook for this critical component in aluminum production.
What Are the Current Trends in China's Prebaked Anode Prices?
China's prebaked anode market has experienced notable price adjustments in July 2025, with benchmark tender prices decreasing by 190 yuan/mt month-over-month according to the latest Shanghai Metal Market (SMM) data. This decline follows a pattern established by a major Shandong-based electrolytic aluminum enterprise that set the tone for the broader market.
Major domestic prebaked anode sales companies have responded by reducing their pricing by an average of 239 yuan/mt compared to June levels, highlighting the widespread nature of the price adjustment. Current SMM data shows prebaked anode prices in China ranging between 4,749-7,894 yuan/mt as of July 2025.
The export market has not been immune to these pricing pressures, with international order prices adjusting downward by approximately $30-40/mt. This reduction primarily stems from falling production costs being passed on to overseas buyers, helping Chinese manufacturers maintain their competitive edge in global markets despite fluctuations in iron ore price trends.
July 2025 Price Decline Analysis
Despite the noticeable price reductions, industry analysts note that the decline has been less significant than market expectations. This phenomenon can be attributed to the underlying cost structures that continue to provide support for anode pricing.
The comprehensive production cost for prebaked anodes reached 4,748 yuan/mt as of July 7, representing a 1.67% increase from June 6. This cost increase, driven primarily by rising low-sulfur petroleum coke prices, has created a buffer against more dramatic price declines.
"The decline in prebaked anode prices has been more moderate than anticipated, providing manufacturers with some breathing room for profitability despite challenging market conditions." – SMM Analysis, July 2025
Price Fluctuation Factors
Interestingly, industry profitability has improved by approximately 70 yuan/mt month-over-month despite the general price decline. This counterintuitive outcome stems from the smaller magnitude of price reductions compared to earlier projections, allowing manufacturers to operate with slightly improved margins.
Nevertheless, most manufacturers continue to operate at marginal profitability levels, highlighting the challenging economic environment facing the prebaked anode industry. The delicate balance between cost pressures and market pricing continues to shape strategic decisions throughout the supply chain, influenced by broader commodity trading insights.
How Are Raw Material Costs Affecting Prebaked Anode Pricing?
The prebaked anode production cost structure is heavily influenced by two primary raw materials: petroleum coke and coal tar pitch. Recent months have shown divergent price trends between these critical inputs, creating a complex cost environment for manufacturers.
Petroleum Coke Market Dynamics
Low-sulfur petroleum coke prices have increased significantly, rising by 6.82% to reach 3,667 yuan/mt in northeast China since June 6. This upward movement has been primarily driven by stockpiling demand from anode material manufacturers anticipating potential supply constraints.
The price increase coincided with scheduled maintenance at refineries in northeast China, which created expectations of reduced supply availability. Market participants responded by increasing their procurement activities, further pushing prices upward.
However, this upward momentum began to weaken in July as prices reached high levels and restocking demand decreased. The slowdown reflects a cooling in market sentiment rather than fundamental changes in supply availability.
Meanwhile, local refinery petroleum coke prices moved in the opposite direction, decreasing by 2.35% to 2,240 yuan/mt during the same period. This divergence between low-sulfur and standard petroleum coke highlights the premium placed on higher-quality raw materials for prebaked anode production.
Coal Tar Pitch Market Conditions
In contrast to petroleum coke, coal tar pitch prices have declined substantially, falling by 12% to 3,517 yuan/mt as of July 7. This significant reduction stems from multiple factors affecting both supply and demand in the coal tar pitch market.
Deep-processing enterprises have maintained high operational capacity, ensuring abundant supply in the market. Simultaneously, downstream demand has weakened considerably, creating downward pressure on prices despite steady production costs.
The divergent performance between petroleum coke and coal tar pitch markets represents a significant factor in the overall cost structure for prebaked anode manufacturers. While one input cost rises, the other falls, creating a partially offsetting effect on total production expenses.
Cost Support Analysis
The combined effect of rising low-sulfur coke prices and falling coal tar pitch has created mixed cost pressure for prebaked anode producers. On balance, raw material price fluctuations have provided partial cost support for prebaked anodes, preventing more dramatic price reductions in the finished product market.
This cost support mechanism helps explain why prebaked anode prices in China have not declined as significantly as some market participants had anticipated. The complex interplay between various raw material inputs continues to buffer the industry against more extreme price volatility.
What Is the Current Supply Situation for Prebaked Anodes in China?
The supply landscape for prebaked anodes in China is undergoing significant changes, with regional shifts and varying operational rates creating a dynamic production environment.
Production Capacity and Utilization
Industry operating rates reached 75.84% in June 2025, representing a decline of 2.42 percentage points from May levels. This slight reduction in capacity utilization reflects several factors, including typical order-based production patterns and seasonal variations.
Despite the reduced operating rate, production has maintained relative stability across the industry. Most enterprises continue to manufacture prebaked anodes based on confirmed orders rather than speculative production, helping to maintain balanced inventory levels throughout the supply chain.
Capacity release has increased as some facilities resumed normal production after completing scheduled maintenance activities. Additionally, technological upgrades at select production facilities have improved manufacturing efficiency, offsetting some of the impacts from reduced operating rates.
"Prebaked anode enterprises typically manufacture according to order volume, maintaining production stability while adapting to changing market conditions," notes SMM analysis from July 2025.
Regional Production Shifts
New projects in southwest China have successfully commissioned baking processes, representing an important development in the regional supply landscape. These new facilities have increased order volume for prebaked anode green blocks in the southwest region, creating new supply sources to meet changing demand patterns.
In contrast, production has declined noticeably in Shandong province, primarily due to the ongoing transfer of electrolytic aluminum capacity to Yunnan province. This regional shift has reduced orders for prebaked anode manufacturers in traditional production centers, forcing adaptation to changing customer geographies driven by mining innovation trends.
Environmental protection inspections in north China have created additional constraints on production at some facilities. These regulatory activities have temporarily limited output from affected manufacturers, contributing to the overall reduction in industry operating rates during June.
Supply Outlook
Looking ahead, market supply is expected to increase slightly in July 2025 despite the regional adjustments. Strong domestic and export orders continue to support high operational levels at most facilities, providing a foundation for steady production volumes.
The industry operating rate showed a rebound trend in early July, with smooth commissioning of replacement projects contributing to improved capacity utilization. However, market participants note that one fewer production day in June contributed to the periodic output contraction, a factor that will not affect July production.
How Is Demand Evolving in the Prebaked Anode Market?
Demand patterns for prebaked anodes continue to evolve, with significant developments in both domestic and international markets shaping overall consumption trends.
Domestic Demand Patterns
Electrolytic aluminum operating capacity remains at high levels across China, providing a solid foundation for domestic prebaked anode demand. However, a notable regional adjustment is occurring due to the ongoing capacity transfer from Shandong to Yunnan province.
China's capacity replacement policy requires production cut verification before new facility construction can proceed. This regulatory framework has temporarily affected the industry operating rate in June as companies navigate the verification process. However, the impact appears to be short-lived, with the operating rate showing a rebound trend in July as replacement projects commission smoothly.
The second batch of capacity replacement projects in Yunnan province has progressed without significant delays, supporting the regional demand transition. This successful implementation has helped maintain overall domestic demand despite the geographical shifts in consumption patterns.
Export Market Performance
The export market has emerged as a bright spot for China's prebaked anode industry, with total exports reaching 923,500 metric tons in 2025 year-to-date, representing a 9.08% increase compared to the same period last year.
Particularly notable is the significant growth in exports to Indonesia, Canada, and the United Arab Emirates, with all three markets showing year-over-year increases exceeding 10%. The combined growth to these destinations has exceeded 80,000 metric tons, highlighting their importance to the industry's export performance.
In contrast, export orders to Malaysia, Iceland, and Russia have declined during the same period. This divergence in regional performance reflects changing production capacities and economic conditions in these traditional export markets where tariffs impact analysis shows varying effects.
Regional Demand Shifts
Southeast Asia and the Middle East have emerged as core engines for export growth, driven by industrial policy support and active investment in aluminum production capacity. These regions are increasingly important to China's prebaked anode manufacturers as they seek to diversify their customer base.
Traditional markets have experienced some contraction due to local capacity adjustments and changing economic conditions. However, the overall strong performance in export orders throughout 2025 has more than compensated for these reductions, supporting industry growth.
The gradual recovery of production capacity in overseas electrolytic aluminum markets has contributed to the robust export demand. As international producers increase output, their consumption of Chinese prebaked anodes has grown accordingly, creating new opportunities for Chinese manufacturers.
What Is Reshaping the Regional Supply-Demand Pattern?
Several fundamental factors are reshaping the regional supply-demand pattern for prebaked anodes in China, creating new challenges and opportunities for market participants.
Electrolytic Aluminum Capacity Transfer Impact
The ongoing transfer of electrolytic aluminum capacity from Shandong province to Yunnan province represents one of the most significant factors reshaping regional demand patterns. This shift has reduced supporting orders for prebaked anode enterprises in Shandong, forcing manufacturers to adapt their production and logistics strategies.
As production capacity relocates to Yunnan, prebaked anode manufacturers in southwest China are benefiting from increased order volumes. This regional rebalancing is creating winners and losers within the domestic industry, with proximity to new aluminum production centers becoming increasingly important.
International markets are also experiencing significant changes, with continuous release of new capacity driving export demand for Chinese prebaked anodes. The gradual recovery of production capacity in overseas electrolytic aluminum markets has created additional opportunities for Chinese manufacturers to expand their global market share.
Environmental Regulation Effects
Stricter environmental protection inspections in north China have created production constraints at individual enterprises. These regulatory activities have forced some manufacturers to reduce output temporarily, contributing to regional supply adjustments.
The environmental compliance landscape continues to evolve, with regulatory requirements becoming increasingly stringent. This trend is likely to continue influencing production decisions and investment patterns throughout the industry, particularly in regions with more challenging environmental conditions and growing focus on energy transition insights.
As production centers relocate in response to both environmental and economic factors, the competitive landscape is shifting accordingly. Manufacturers with operations in multiple regions may be better positioned to navigate these changes compared to those with geographically concentrated production facilities.
Market Resilience Factors
Despite the regional adjustments, the prebaked anode market has demonstrated remarkable resilience due to dual demand support from both domestic and international markets. This balanced demand profile has helped maintain overall industry stability despite significant regional shifts.
Strong growth resilience continues to characterize the export market, with international customers providing a reliable source of demand for Chinese manufacturers. This export strength has offset some of the challenges created by domestic regional adjustments, supporting industry profitability.
The smooth commissioning of replacement projects in Yunnan has facilitated the regional demand transition, preventing more disruptive market impacts. This successful implementation highlights the industry's ability to adapt to changing market conditions while maintaining operational continuity.
What Is the Market Outlook for Prebaked Anodes?
Looking ahead, several key factors will shape the market outlook for prebaked anodes in China and globally.
Short-Term Price Forecast
Prebaked anode prices in China are expected to remain subdued in August 2025, continuing the trend established in July. This forecast reflects ongoing cost pressures and the gradual cooling of market sentiment following the recent period of stockpiling activity.
The low-sulfur petroleum coke market is likely to maintain a slight upward trend in the near term, supported by ongoing supply constraints and steady demand from anode manufacturers. However, this price support may be limited by reduced restocking activity as manufacturers adjust to current market conditions.
Medium and high-sulfur petroleum coke markets are showing insufficient upward momentum, with prices potentially stabilizing at current levels. This market segment faces the risk of high-level price corrections as market sentiment cools and stockpiling activities diminish.
"Market participants should remain vigilant for potential petroleum coke price corrections as sentiment gradually cools, which could impact prebaked anode pricing in the coming months." – SMM Analysis, July 2025
Supply-Demand Balance Projections
Recent stockpiling activities in the anode material market temporarily boosted market sentiment, creating a perception of improving demand conditions. However, analysts note that no significant improvement has been observed in actual downstream demand, suggesting that the stockpiling was primarily precautionary rather than response to increased consumption.
This disconnect between sentiment and fundamental demand creates the potential for petroleum coke price corrections as market participants recognize the limited improvement in end-user consumption. Such corrections could provide some cost relief for prebaked anode manufacturers in the coming months.
Despite these challenges, the prebaked anode industry is expected to maintain marginal profitability, with most manufacturers continuing to operate with thin but sustainable margins. The balanced supply-demand situation should prevent more dramatic price fluctuations in the near term.
Industry Transformation Trends
The ongoing reshaping of regional supply-demand patterns represents a significant long-term trend for the prebaked anode industry. As electrolytic aluminum capacity continues to transfer to regions with more favorable energy costs and environmental conditions, prebaked anode production is likely to follow suit.
Export markets will remain increasingly important for industry growth, particularly as developing economies in Southeast Asia and the Middle East expand their aluminum production capacity. Chinese manufacturers with strong international connections may be better positioned to capitalize on these opportunities.
Production efficiency improvements through technological upgrades will continue to be a focus area for manufacturers seeking to maintain competitiveness in a challenging market environment. Innovations in the baking process and other production technologies could provide competitive advantages to early adopters.
FAQ: China's Prebaked Anode Market
What factors are driving the decline in prebaked anode prices in July 2025?
The price decline is primarily influenced by adjustments in benchmark tender prices by major electrolytic aluminum enterprises, with one Shandong-based company reducing prices by 190 yuan/mt month-over-month. Additionally, major sales companies have synchronized their pricing reductions, with decreases averaging 239 yuan/mt compared to June levels. However, the decline has been less severe than expected due to partial cost support from rising low-sulfur petroleum coke prices.
How are raw material costs affecting prebaked anode production economics?
Raw material costs show mixed trends with low-sulfur petroleum coke prices increasing by 6.82% while coal tar pitch prices declined by 12%. The comprehensive production cost reached 4,748 yuan/mt as of July 7, representing a 1.67% increase from June 6. This divergent movement in key raw materials has created a complex cost environment, providing partial support for prebaked anode pricing while limiting manufacturer profitability.
What regions are showing the strongest export demand for Chinese prebaked anodes?
Southeast Asia and the Middle East have emerged as the core engines driving export growth, with Indonesia showing particularly strong demand. Exports to Indonesia, Canada, and the UAE have all increased by more than 10%, with combined growth exceeding 80,000 mt. Total exports reached 923,500 mt year-to-date, representing a 9.08% year-over-year increase. These regions benefit from industrial policy support and active investment in aluminum production capacity.
How is the transfer of aluminum electrolysis capacity affecting the prebaked anode market?
The ongoing transfer of electrolytic aluminum capacity from Shandong to Yunnan province is reshaping regional demand patterns. This shift has reduced supporting orders for prebaked anode enterprises in Shandong while creating new opportunities in southwest China, where new projects have successfully commissioned baking processes. The capacity replacement policy, which requires production cut verification before new facility construction, has temporarily affected industry operating rates but shows signs of normalizing as projects commission smoothly.
Key Statistics: China's Prebaked Anode Market (July 2025)
| Metric | Value | Change |
|---|---|---|
| East China Prebaked Anode Price Range | 4,749-7,894 yuan/mt | -3.85% MoM (benchmark) |
| Comprehensive Production Cost | 4,748 yuan/mt | +1.67% from June 6 |
| Industry Operating Rate (June) | 75.84% | -2.42 percentage points MoM |
| Low-Sulfur Petroleum Coke Price (NE China) | 3,667 yuan/mt | +6.82% from June 6 |
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