Daily Archives: April 8, 2009

Weekly market review April 8 2009

Written by Paul Adkins

Alumina

The National Strategic Reserves Board (SRB) purchases of aluminium have begun to positively affect the domestic alumina market. Last week, imported alumina prices rose US$20/tonne to US$230-240/tonne. Meanwhile, domestic non-Chalco alumina prices have risen RMB370-400/tonne to RMB2300-2350/tonne, while the Chalco price went up RMB100/tonne to RMB2300/tonne.

 Aluminium

Thanks to SRB purchases, Chalco’s aluminium prices rose RMB400-500/tonne to RMB14100-14200/tonne last week.

 Green Petroleum coke

Conditions on the market for petroleum coke have carried over from the prior week. Last week saw more refineries beginning to cut prices -and with the exception of coastal areas where lower prices are already in place, northeastern provinces have started to adjust prices downward.

The significant increase in low sulphur coke prices in the northeast over previous periods has both exacerbated operating cost pressure on downstream plants, and caused demand for low sulphur coke to decline. The price of low sulphur coke in northeastern China is expected to decrease further.

The price drop in Shandong province and northern China has been marginal. The price gap between Petrochina refineries and local refineries normally stands at RMB 150-200/tonne. As the operating rate at local refineries increases, the price of coke may further slide in Shandong and northern Chinese provinces.

Coke prices along the Yangzi River were RMB1150-1200/tonne last week. Prices are considered to have already reached a bottom, and the market is expected to stabilize.

The lower end of high sulphur coke prices dropped to RMB780/tonne -close to expectations for a floor of RMB 750/tonne.

 Calcined Coke 

Along with the decrease in green coke prices, last week saw low sulphur CPC prices dropping RMB200/tonne to RMB2100-2200/tonne, moderate sulphur coke prices declining to RMB1500-1600/tonne, and the prices for high sulphur coke down RMB100-150/tonne to RMB1350-1400/tonne.

Meanwhile imported GPC continues to sit for sale at the port level -which is prompting many buyers to wait and see where prices will go next.

 Coal Tar

Coal tar suppliers have been speeding up their price increases, with prices rising to RMB2000-2100/tonne in Shanxi province, to RMB2100-2300/tonne in Hebei province, and to RMB2300/tonne in Shandong province.

The word is that not only are prices climbing very fast, but several suppliers could also already be running out of supplies -there is a chance, however, that some suppliers may actually be holding goods from the market to try pushing prices higher.

 Coal Tar Pitch

Driven by a shortage in coal tar and the rise in coal tar prices, the increase in domestic coal tar pitch prices continued last week. Prices in Shanxi province rising to RMB2050-2100/tonne for modified pitch, and to RMB2000/tonne for moderate temperature pitch. In Hebei province, the price for modified pitch rose RMB200/tonne to RMB2300/tonne, while moderate temperature pitch prices increased to RMB2150-2200/tonne. In Shandong province, the modified pitch price rose RMB150/tonne to RMB2350/tonne.

While exports remain the best alternative for Chinese coal tar pitch producers, the sustained rise in domestic prices could put significant pressure on export growth.

 Anode

Mainstream anode market prices remained unchanged at RMB2600-2800/tonne last week. Actual prices, however, have increased in Shanxi province, Inner Mongolia and Guangxi province.

The quoted price in Shanxi province stood mostly around RMB2700-2800/tonne, as it does currently in Shandong province. Meanwhile, some high-end anode in Henan province sold for RMB3100-3150/tonne, while mainstream prices were around RMB2600-2800/tonne.

Domestic market demand for anode has increased thanks to the purchases of aluminium by the SRB, while export demand remains very weak.

Anode producers in China have to deal with the issue of high inventory.

  Cathode

Cathode block prices slipped slightly compared to the previous month.

Cathode manufacturers in China mainly produce vibration molding cathode block. The price of vibration molding 30% graphite block stands at around RMB 6500/tonne (ex-factory price plus tax), while 50% graphite block currently sells for RMB7000-10000/tonne. Only a few cathode manufacturers based in Gansu, Guizhou, Qinhai, Henan and Yunnan provinces produce extrusion molding block. Given longer usage life, extrusion molding block is more expensive than vibration molding block. Extrusion molding 30% graphite block is currently priced at RMB7800-8000/tonne.

 Aluminium Fluoride

The month of March saw the price of aluminium fluoride continue to decline by another RMB300/tonne. The listed prices for aluminium fluoride were RMB4500-6000/tonne for dry method fluoride and RMB4500/tonne for wet method fluoride. Currently, few manufacturers produce aluminum fluoride using the wet method, and supply of wet method fluoride is limited. Chalco’s purchase price dropped to RMB5200/tonne from RMB 5500/tonne.

There were no significant changes on the raw materials side. The price of fluorspar stands at RMB1200/tonne, and the price of aluminium hydroxide is RMB1300/tonne. The listed prices for cryolite, on the other hand, slumped to RMB4200-5800/tonne.

The recent rebound in primary aluminum prices should support an increase in aluminum fluoride prices. However, the late shift within the aluminum industry does not appear to have had an impact yet on the aluminium fluoride market.

As at the end of March, the quoted prices for aluminium fluoride (dry method) were RMB5500/tonne in Hunan province (where monthly production stood at around 10,000 tonnes), RMB4900-5000/tonne in Shandong province, RMB4800-5000/tonne in Zhejiang province and RMB5000-6000/tonne in Henan province.