High-value petroleum coke: The transformation from “fuel” to “material”
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Driven by the \"dual carbon\" strategy and the new energy industry, petroleum coke is evolving from a product with low prices or a conventional fuel to a key material that supports high-end manufacturing and the new energy sector. I. Value Reconstruction: Petroleum coke is a solid carbon product obtained through a thermal cracking process, using as raw material the bottom fractions of crude oil that are separated via multiple distillations. In the past, it was generally used as a by-product of oil refining and had low value. Thanks to technological advancements, it has now become a high-value product used in areas such as energy storage batteries, electric vehicles, and the clean production of aluminum electrolysis. 1. Needle coke: It belongs to the high-end category of specialty petroleum cocks, and features a low thermal expansion coefficient, low sulfur content, low metal content, and high electrical conductivity. It is the sole raw material for manufacturing ultra-high power graphite electrodes used in electric arc furnace steelmaking, and it is also a key raw material for high-performance lithium battery anode materials. 2. Special coke for anode materials: Used specifically in the production of lithium battery anode materials, it has strict requirements regarding parameters such as sulfur content and ash content, and serves as a fundamental material for power batteries in new energy vehicles. 3. Special coke for low-emission anodes: High-quality sponge coke or low-sulfur coke, primarily used to produce pre-baked anodes required for aluminum electrolysis; it is a raw material in the aluminum electrolysis industry. II. Market Size and Demand Structure Currently, the petroleum coke consumption market shows a divided trend: demand for use as a material continues to rise, while demand for use as fuel is gradually declining. 1. Electrolytic aluminum: The electrolytic aluminum industry is the largest downstream consumer of petroleum coke. By 2025, the consumption of pre-baked anodes for petroleum coke is expected to be around 25 million tons, accounting for 51% of the total consumption of petroleum coke. As domestic electrolytic aluminum production reaches the policy ceiling, future demand growth will rely primarily on exports, which will drive an ongoing improvement in the performance characteristics of petroleum coke used for anodes, such as lower sulfur and vanadium content. 2. New energy batteries: This is the downstream sector where petroleum coke consumption is growing the fastest during the 14th Five-Year Plan period. By 2025, the consumption of petroleum coke for producing anode materials will account for about 14%. With the rapid development of the new energy vehicle and new energy storage industries, it is estimated that by 2030, the consumption of petroleum coke for anode materials will increase to around 11.5 million tons. The demand for needle coke is expected to reach 2.05 million tons by 2030, with an average annual compound growth rate of around 9%. 3. Fuel market: Suppressed by policies, continuing to shrink. It is estimated that by 2030, consumption of petroleum coke for fuel purposes will drop to around 5 million tons, with an average annual decline of about 10%. Overall, it is estimated that by 2030, the total consumption of petroleum coke will reach 49.5 million tons, with the increase primarily driven by use in new materials.
III. Supply Structure and Profit Analysis 1. Production Capacity and Supply: By the end of 2025, the processing capacity of domestic delayed coking units will be approximately 152 million tons per year, with an annual production of petroleum coke amounting to 31.73 million tons. The total additional production capacity expected between 2026 and 2030 will be only 9.5 million tons, with a slowdown in growth rates, and this increase will be concentrated mainly in the East China region. 2. Price and profit: The petroleum coke market features clear \"product grading\" and \"price stratification\". High-end products have a significant premium. The high-end carbon materials supplied by Sinopec to the market exceeded 1 million tons for the first time in 2024, resulting in a significant improvement in economic benefits. The needle coke produced by Jinling Petrochemical achieved a gross margin of over 40% in 2024. The price difference between ordinary high-sulfur coke and low-sulfur needle coke can be 2-3 times, resulting in a significant profit margin. IV. Production Processes and Technical Trends 1. Refineries primarily produce petroleum coke through the delayed coking process, which accounts for over 85% of such production in China. The principle involves feeding high-temperature residue oil heated to around 500°C into a coke tower, where it undergoes deep cracking and condensation reactions. To produce high-end products such as needle coke and anode coke, it is necessary to pre-treat low-quality raw materials like catalytic slurry and vacuum residue in order to remove impurities such as sulfur and metals. Therefore, “pre-treatment of coking feedstock” has become a core prerequisite for producing high-value petroleum coke. At the beginning of April, Dongfang Shenghong invested 3.455 billion yuan to build a coking feedstock pretreatment project with an annual capacity of 2 million tons, which is a manifestation of this goal. 2. Industry technologies are evolving toward precise control and green efficiency. Cutting-edge research focuses on deliberately controlling the microcrystalline structure of petroleum coke by regulating the co-carbonization ratio of precursors such as aromatic-rich heavy oils and coal tar pitch, thereby optimizing its electrochemical properties as an anode material. This approach aims to overcome the limitations associated with traditional graphite materials and achieve a true upgrade in product quality. V. Industrial Structure and Future Trends At present, the production capacity of high-value petroleum coke in China features a pattern of \"regional concentration and differentiated enterprises\"; the East China region accounts for over 55% of this capacity, with Shandong, as a key area for domestic oil refining, accounting for approximately 40% of the capacity in East China ； (1) Corporate layout: 1. Dongfang Shenghong invested 3.455 billion yuan to build a pretreatment facility with an annual capacity of 2 million tons. By leveraging its own resources of 16 million tons per year of residue oil generated in its integrated refining and chemical processing operations, the company has established a complete industrial chain that spans from crude oil to residue oil, through pretreatment, to high-value coals and finally to new energy materials. 2. By constructing a 150,000-ton/year slurry dewatering unit, Jinan Refining & Chemical has achieved 100% in the sales share of coke dedicated for anode materials and coke dedicated for pre-baked anodes, demonstrating significant success in its transformation toward higher-end products. 3. In addition, enterprises such as Shandong local refineries and Hengyuan Petrochemical have invested in catalytic slurry pretreatment and solvent deasphalting processes in order to capture the market for high-value coke. (II) Development trends: 1. With the evolution of process technologies, precision improvement techniques such as pretreatment of catalytic slurry and hydroprocessing of residue will become more widely adopted. New technological advancements such as ceramic membrane filtration and hydroaromatization for restoration will further enhance the quality and yield of high-value coke. The products are intended for use in high-power graphite electrodes, advanced battery anodes, specialty coke for anode materials, and low-emission anodes, among other high-end carbon materials ； 2. Industrial chain collaboration is deepening; refining and chemical companies work closely with enterprises in the field of new energy materials to ensure a stable supply of raw materials and the sale of products, thus creating a collaborative ecosystem of \"refining and chemicals – carbon materials – new energy\" ； 3. Production capacity continues to expand, with East China and North China serving as the key areas for capacity concentration and growth. Domestic high-value cokes are expected to gradually replace imports, thereby enhancing China’s influence in global supply chains. With advancements in production technology, rising demand for new energy sources, and the benefits brought by policies, the production approach of \"pre-treatment of coking feedstocks + high-value petroleum coke\" may become a breakthrough point for the long-stagnant refining industry.
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