Electrolytic aluminum plants based in Henan were forced by local government to cut production by half and even two thirds as the government stepped further in implementing the policy, according to a news report by domestic media. Shutdown in the third quarter was estimated to involve 2-mil-mt/yr of production capacity (equivalent to 10% of China's total production capacity of electrolytic aluminum). The province was estimated to cut 400,000mt of output in the whole year. The fourth quarter alone would see 200,000mt of output-reduction, which means the electrolytic aluminum sector would decrease petcoke demand by about 130,000mt, namely, a 30,000mt decline per month, it is believed.
Some prebaked anode producers based in Shandong had already been affected. A large plant based in Shandong, which previously took in 40,000mt of petcoke per month, had cut its petcoke purchases by 50%, a company source said. Another producer also said they would reduce petcoke purchases by 30% as from late October at the latest.
Petcoke supplies from Shandong independent refineries, which were subject to negative impact, cut petcoke output in the month. However, the influence was short-term and small-scale, as most local refineries still remained in normal production, delivering normal outputs to the market. With more domestic major refineries to come back from maintenance in the fourth quarter, petcoke output would further ascend.
In view of depressed downstream demand and mounting supplies, petcoke prices would be faced with a downturn in the fourth quarter, a source with Sinopec estimated on the premise of stable crude benchmarks.
