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30 JANUARY 2018 AL CIRCLE

SMM projects fall in prebaked anode prices in 2018; A00 ingot prices drop in all major markets

EDITED BY : BEETHIKA BISWAS 2MINS READ

SMM expects the fundamentals of the prebaked anode market to change in 2018, as it may turn to oversupply following a year of surging prices. The shift is being visible in January with a drop in prices and, extension of payment cycle and commissioning of new capacity.

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Prebaked anode prices in east China were down RMB 150 per tonne this month from levels seen in December, according to SMM data. Prices in February are also set to drop by over RMB 100 per tonne as supply of calcined coke became less tight.

SMM has also observed that aluminium smelters are delaying their payment for prebaked anode for up to a month or more. This showed sellers’ willingness to increase delivery of prebaked anode. Another factor that is cutting down the need to procure such material from outside is the increasing capacity of prebaked anode by smelters.

According to an SMM analysis, a total of 4.08 million tonnes of prebaked anode capacity will be added in China in 2018. On the other hand data shows about 4.84 million tonnes of new aluminium capacity would come online in China this year. This shows that about 1.71 million tonnes of prebaked anode capacity will be surplus, as it takes 0.49 tonnes of prebake anode to produce 1 tonne of aluminium.

Other than these obvious calculations, SMM forecasts that other factors like the actual commissioning of the planned capacities and changes in environmental protection policies would also affect the prebaked anode market in 2017. Notwithstanding all these, prebaked anode supply in 2018 is expected to increase in 2018 and prices are set to drop from the 2017 levels. 

Prebaked anode prices register no change today in Chinese domestic markets. A00 ingot prices are winding off January with a drop and today's price stands at RMB 14,370 per tonne. The prices are expected to move within a range of RMB 14,350-14,390 per tonne. Spot discount will range within RMB 150-110 per tonne today. 

 

 


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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