This Week’s Commentary (April 11–April 14): The domestic market price of cathode carbon blocks remained stable this week. Currently, due to epidemic prevention and control measures across various regions, logistics and transportation have been generally restricted, resulting in sluggish shipments from cathode carbon block manufacturers and a slight accumulation of inventories. Most companies are focusing on fulfilling earlier orders and depleting existing stocks. Meanwhile, low-sulfur coke prices have risen again, while calcined anthracite coal and coal tar pitch have seen modest increases, putting continued pressure on costs and intensifying production cost burdens for cathode manufacturers. At present, some companies affected by the pandemic are temporarily suspending acceptance of new orders, placing significant operational pressure on these enterprises. Downstream production is accelerating, boosting demand for cathode carbon blocks. As of April 14, 2022, the average market price of cathode carbon blocks stood at 15,250 yuan per ton, with no change from the previous week, representing a fluctuation rate of 0.00%.

Upstream Raw Materials Market Dynamics

The mainstream coal tar pitch market is experiencing upward price momentum. Due to ongoing pandemic-related transportation restrictions, supply remains tight in some regions, while demand continues to provide strong support. The favorable supply-demand dynamics are keeping coal tar pitch prices stable yet elevated. The low-sulfur calcined coke market is seeing robust trading activity; driven by rising raw material costs, the market price of low-sulfur calcined coke continues to hold firm. The market price of electrically calcined anthracite coal maintains its upward trend, with good operational rates in major producing areas and reasonably adequate supply. Tight supply and high raw material prices continue to underpin the rise in electrically calcined anthracite coal prices. Overall, favorable cost factors are boosting the market price of cathode carbon blocks.

Due to the impact of the epidemic, the supply of cathode carbon blocks is tight.

Currently, enterprises in Henan Province have ample orders, and their production has increased by 1,000 tons, with a significant rise in the output of fully graphitized cathode carbon blocks. In Qinghai Province, enterprises produce relatively fewer cathode carbon blocks, with most companies using them internally for their own operations. Enterprises in Ningxia Province are experiencing stable production and good shipment performance. In Shanxi Province—the main production area—strict epidemic control measures have made it difficult to procure and transport raw materials; some enterprises report having only small inventories of raw materials, which could directly impact production as time goes on. At present, raw material inventories remain low, and shipments are under pressure, with new orders scarce—most companies are focusing on fulfilling existing contracts. Overall, this week the supply of cathode carbon blocks remains tight.

Downstream Electrolytic Aluminum Market Dynamics

Downstream electrolytic aluminum prices remain high, and enterprises are operating at full capacity with reasonably good profits, which is favorable for the consumption in the cathode carbon block market. Domestically, influenced by overseas markets and exacerbated by a supply gap abroad, domestic demand is benefiting, leading to a rebound in spot aluminum prices. Internationally, the three major U.S. stock indexes closed slightly lower, while oil prices surged sharply, driving a rebound and rise in global aluminum prices.

Overall, considering all factors...

The raw material, low-sulfur coke, is consolidating at a high level, providing strong cost support. Meanwhile, the downstream electrolytic aluminum market continues to see relatively rapid new capacity additions and resumption of production, maintaining robust demand and boding well for future prices of cathode carbon blocks. We expect that, in the short term, the market price of cathode carbon blocks will likely trend upward.