Since entering August, domestic petroleum coke supply has remained low, while demand-side purchasing enthusiasm shows no sign of waning. As a result, refinery coke prices have continued to stay stable with an upward trend. With the recent release of the third batch of import quotas for crude oil under non-state-owned trade, whether petroleum coke production will be adjusted in the future and whether prices can remain firm have once again become the focus of attention.

As we move past the middle of August, domestic petroleum coke prices continue to trend upward, with overall market demand remaining robust. Regarding low-sulfur coke, the negative-electrode material market is currently providing strong support for shipments of low-sulfur coke; as a result, low-sulfur coke prices have been on an upward trajectory since the third quarter. As of mid-August, the price of ordinary-grade No. 1 coke has risen by a cumulative 900 yuan per ton compared to June 30, while the price of high-quality No. 1 coke has risen by a cumulative 1,000 yuan per ton. In the medium-sulfur coke segment, prices at major refineries continue to climb. The supply of medium-sulfur petroleum coke in Yangtze River basin regions remains stable, and demand remains strong, putting little pressure on refinery shipments, thus driving prices to rise gradually within a narrow range. As for high-sulfur coke, due to production cuts at Zhejiang Petrochemical and reduced exports as Sinopec prioritizes internal use, external sales resources of petroleum coke are limited. In Guangxi and Yunnan provinces, power restrictions have prompted some downstream enterprises to cut production. However, as refineries increase their self-consumption of petroleum coke while reducing exports, overall coke shipments remain relatively stable, and refinery inventories stay low. In Jiangsu province, highway transportation has largely resumed, causing high-sulfur coke prices in East China to rise accordingly, with significant increases in road freight rates.

According to data analysis, since the third quarter, China's daily production of petroleum coke has generally shown a volatile downward trend, with a significant decline compared to the same period last year. Specifically, since August, daily petroleum coke production has fluctuated around 70,000 tons, with the lowest daily output dropping to 68,000 tons—a decrease of 14% compared to the same period last year. Although some refineries that underwent maintenance earlier have gradually resumed operations, due to ongoing production cuts at certain domestic petroleum coke facilities, it will be difficult for overall petroleum coke supply to increase substantially in the short term.

The reduction in crude oil quotas for 2021 has caused some disruption to the production of certain refineries. As of now, the total crude oil quotas for 2021, divided into three batches, amount to 118.64 million tons, a decrease of 14.06 million tons, or 11%, compared to 2020. While smaller independent refineries can flexibly use imported fuel oil to fill production gaps, larger refining companies may see a reduction in output. Overall, the supply of petroleum coke is expected to see only limited growth in the later period.

According to market analysis, as of July 2021, China’s installed capacity for primary aluminum smelting reached 43.08 million tons, with operating capacity at 28.984 million tons. In July, domestic primary aluminum production totaled 3.3206 million tons, an increase of 109,600 tons from June, representing a growth rate of 3.41%. Although the capacity utilization rate of primary aluminum smelters has slightly declined recently, it still remains above 90% overall.

Recently, on August 7, Guangxi Power Grid Company issued the “Notice on Urging Electrolytic Aluminum Enterprises to Avoid Peak Load.” The notice clearly stated that it plans to implement peak-shaving measures for electrolytic aluminum enterprises across the region, aiming to reduce the average electricity load by more than 30% by August 15, 2021. Currently, electrolytic aluminum enterprises in Guangxi are actively cooperating with the power peak-shaving efforts. The six Guangxi electrolytic aluminum enterprises involved in this planned capacity reduction are expected to cut production by a total of 450,000 tons. Under the influence of multiple market factors, terminal prices for electrolytic aluminum have risen sharply, currently climbing above 20,200 yuan per ton. Driven by power restrictions, both electrolytic aluminum producers and processing companies are becoming increasingly bullish. The carbon market for aluminum-related applications is experiencing robust trading activity, providing continued strong support for shipments of petroleum coke and carbon products.