7,700 yuan per ton – the price of petroleum coke continues to reach new highs!

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Since the beginning of this year, the petroleum coke market has faced a supply shortage, leading to soaring prices. As of April 11, the price of 1# petroleum coke in the Northeast region reached around 7,700 yuan per ton, setting a new historical high. Industry experts believe that although the current upward trend has slowed down, the tight supply situation provides support, leaving room for further price increases in petroleum coke in the future. The market saw a comprehensive surge. Compared to last year, the petroleum coke market in 2022 can be described as skyrocketing. The upward trend in petroleum coke prices this year actually began in January; during that month, the average price rose to 4,154 yuan, representing a month-on-month increase of 9.03%. Since then, the upward trend in the petcoke market has been unstoppable. So far, petroleum coke prices across the country have seen a general upward trend, with year-on-year increases ranging from 118% to 191%. Among them, the price of low-sulfur coke has risen to 7,300 yuan, an increase of 1,000 yuan since early February, representing a rise of 15.87%. This is the first time since 2018 that the price has exceeded the 7,000-yuan mark. The prices of medium- and high-sulfur cokes are also rising to new heights. The average transaction price of medium-sulfur coke in the first quarter saw a year-on-year increase of 103% to 123%. The average price of high-sulfur coke in the first quarter was 1,857 yuan, representing a year-on-year increase of 39.85%. The price increase for 2B petroleum coke, which falls between medium- and low-sulfur petroleum coke, was even higher than that of low-sulfur coke. Wang Chunming, general manager of Shandong Ruiyang Chemical Trade Co., Ltd., said that in Shandong, the largest producer of petroleum coke in the country, the price of petroleum coke rose by 66%~90% in the first quarter. By the end of March, the price of petroleum coke with a sulfur content of less than 1.5% exceeded 6,000 yuan, reaching a record high. As market prices continue to rise, the profit margins for manufacturing enterprises also increase gradually. Taking the Shandong region as an example, the average profit from delayed coking in January was 489 yuan, while it rose to 1154 yuan by March, an increase of 320 yuan compared to February. Supply continues to decline. One of the key factors behind this sharp rise in the market is the shortage of goods available for sale, resulting from reduced supply. He Junsong, a sales representative from Jihua, explained that starting in mid-to-late January, due to production restrictions, some refineries reduced their output, resulting in an average monthly operating rate of 68.56%. Thereafter, the capacity utilization rate of domestic delayed coking units declined again, with the operating rate of such units dropping to 64.14% at one point. Since March, the impact of domestic production restriction policies has gradually diminished; some refineries have resumed operations, while individual refineries continued to be shut down for maintenance as planned. As a result, the monthly capacity utilization rate of coking units remained above 65%. In addition, tighter crude oil quotas and soaring crude oil prices also have a negative impact on the operation of local refining plants. Overall, the average capacity utilization rate of domestic refinery delayed coking units in the first quarter was 62.67%. In terms of imports, it is estimated that around 1.4 million tons of petroleum coke will enter the country in April, but most of this will be medium-to-high sulfur sponge coke and pelletized coke, which will have a limited impact on the domestic petroleum coke market. Starting from April, the maintenance season begins, and the supply of domestic petroleum coke resources will tighten. Reports indicate that alone in April, the 1 million tons per year delayed coking unit at Zhonghai Asphalt in Binzhou, the 2.4 million tons per year delayed coking unit at Zhoushan Petrochemical, the 1 million tons per year delayed coking unit at Youtai Petrochemical, and the 1 million tons per year delayed coking unit at Liaohe Petrochemical are all scheduled for maintenance. As a result, the supply of petroleum coke in China will further tighten, providing additional momentum for further price increases in the market. Strong demand support: Since March, overall demand for petroleum coke has remained healthy, and the operating rate of electric arc furnaces for steel production has increased significantly, leading to a rise in demand for electrodes. The markets for petroleum coke as a carbonizing agent and graphite electrodes have limited capacity to accept high-priced, low-sulfur coke. Meanwhile, demand for anode materials continues to grow, providing strong support and positive impacts on the market for low-sulfur coke. The steady demand for procurement in certain segments of the aluminum carbon market remains unchanged, which provides some positive impetus for the shipment of low-sulfur coke. Hao Aichun, an analyst at Zhuochuang Consulting, explained that the trend of electrolytic aluminum on the demand side is generally positively correlated with the trend of petroleum coke. The end-market demand for electrolytic aluminum remains robust. The price of alumina has been on the rise, driving up the price of electrolytic aluminum accordingly. After the Spring Festival, the aluminum price has been fluctuating above the 20,000-yuan mark. As a result, profits for aluminum producers have once again reached a high level of over 4,000 yuan. Driven by high profits, domestic aluminum electrolysis companies are actively resuming production. In addition, 1.8 million tons of new production capacity for electrolytic aluminum will come online in China this year. The increase in capacity utilization in the electrolytic aluminum industry, along with the gradual commissioning of new production capacities, will provide strong support for the domestic petroleum coke market. Looking ahead, there is still room for an increase in the operational capacity of the carbon-grade electrolytic aluminum industry. Under the combined effect of a decreasing supply of petroleum coke and rising demand from downstream industries, the shortage of domestic petroleum coke resources is likely to worsen further, which in turn will keep pushing up domestic petroleum coke prices to new highs.