Zhongtai: The gap between supply and demand of petroleum coke may increase, prebaked anode industry chain prices are expected to rise.

Zhongtai released a research report stating that since September 2024, the price of petroleum coke has been continuously rising, showing an accelerating trend recently. On the demand side, the proportion of new energy fields (lithium battery anodes, photovoltaic silicon materials) has exceeded 15%, driving the restructuring of petroleum coke demand structure; on the supply side, adjustments to fuel oil tariffs and tax refund policies have led to reduced production at refineries, combined with no new delayed coking units planned domestically in 2025, the supply-demand gap is showing early signs. It is estimated that the supply-demand gap of petroleum coke will reach 870,000 tons in 2025, and prices of related products in the industry chain are expected to continue to rise. Zhongtai's main points are as follows: Accelerated rise in petroleum coke prices, led by low-sulfur coke The current round of petroleum coke price increases started in September 2024, with low-sulfur coke leading the way. From September 2024 to present, the prices of 1#, 2#, 3#, and 4-5# petroleum coke have increased by 134%, 119%, 77%, and 58% respectively, with further increases in the past month to 54%, 49%, 41%, and 37%. Restructuring of demand structure: New energy accounts for over 15% In recent years, the proportion of prebaked anodes in downstream demand for petroleum coke has been decreasing year by year, with the prebaked anode sector accounting for 55% of domestic petroleum coke demand structure in 2024 (compared to 60% in 2020). At the same time, the new energy sector is developing rapidly, with lithium battery anodes accounting for 8% of total petroleum coke demand, and this proportion is expected to increase to 11% by 2026. When considering the consumption of silicon on petroleum coke, the overall share of the new energy sector has reached 16%; and the overall share of the new energy sector is expected to further increase to 21% by 2026. The rapid growth of lithium battery anodes and photovoltaics is an important driving force for the rapid growth of petroleum coke demand. Rigid production cuts on the supply side, anticipating the supply-demand gap As of January 1, 2025, China adjusted the tariff rates and tariff items for imported fuel oil, raised the import tariffs for fuel oil, and changed the tax refund policy. The new tax policy has exacerbated the losses of refineries and lead to a reduction in production, with local refineries operating at their lowest levels in nearly five years, with Shandong refineries being the most affected. With no new delayed coking units planned domestically in 2025, combined with existing production capacity closures, it is expected that there will be a supply shortage in the petroleum coke market in the next two years. Considering the impact of plant closures on production, the forecast for domestic production in 2025 has been revised downwards, with an estimated total annual supply of petroleum coke of 45.21 million tons, a decrease of 1% compared to the previous year. On the demand side, driven by prebaked anodes, negative electrodes, and silicon materials, the estimated total annual demand for petroleum coke is 46.08 million tons, an increase of 2% compared to the previous year. Petroleum coke is once again entering a supply shortage cycle, with the estimated supply-demand gaps in 2025-2026 being 870,000/660,000 tons respectively. Investment advice: The tight supply-demand situation for petroleum coke will drive up the prices of prebaked anodes, and further transmission to the electrolytic aluminum and alumina segments. With the reversal of the supply-demand situation in the petroleum coke market, prices of petroleum coke and prebaked anodes are expected to continue to rise, and it is recommended to pay attention to the core targets of the petroleum coke/prebaked anode industry chain, Sunstone Development (603612.SH). Risk warning: Pay attention to macroeconomic fluctuations, policy changes, unexpected release of raw material production capacity, and industry estimation deviation risks.