Carbon emission reduction brings both challenges and opportunities to prebaked anode industry
----Interview with Yong Men
General Manager
Jining Carbon Group Jining Carbon Imp & Exp Co.
JiningCarbon Group, established in 1987, covers an area of around 86.7 hectares and has over 2,200 employees, with total assets worth roughly RMB4.5 billion. The Group focuses on production of prebaked anode with production capacity of 300,000tpy and exports to over 20 countries and regions, including the U.S. and Canada. The Group organized and initiated research and development of more than 41 prebaked anode and carbon materials standards domestically and internationally, wining 75 China patents including 12 creation patents, acquiring over 500 innovation achievements. They created cost-saving prebaked anode, and the carbon unit consumption could reduce by over 15kg during aluminum production.
Asian Metal: Thanks for joining the interview Mr. Men. Please kindly give a brief introduction of your company.
Mr.Men: Our Group was established in 1987 and the production capacity for prebakedanode and coal tar pitch reaches 300,000tpy and 200,000tpy respectively, withcoal tar processing capacity at 500,000tpy. We started prebaked anode exportsfrom the year of 2000.
Asian Metal: From early 2021, Chinese domestic sales prices and export prices of prebaked anode kept rising. How do you think of the reasons behind? Will the trend continue in H2?
Mr.Men: First of all, the strong demand. Chinese aluminum smelters maintained high operating rates because of the increased profits; secondly, pet coke prices in China went up, supporting prebaked anode prices. In the second half of this year, I believe prebaked anode prices would continue to rise slowly, as Chinese pet coke producers would reduce production for the carbon emission regulation and pet coke prices would go up. In addition, the demand from Europe and the Middle East would improve, as prebaked anode producers in those countries cut production. So far as I learned, producers from Europe cut production by around 220,000tpy.
Asian Metal: From 2020, many aluminum projects in China including Shandong moved to Yunnan. How will that affect Chinese prebaked anode structure?
Mr.Men: It is true. Weiqiao Aluminum, the biggest aluminum producer in China,moved part production lines from Shandong to Yunnan and the demand for prebaked anode in Shandong becomes weak. Prebaked anode producers from Henan and Hebei, who once sold to Weiqiao Aluminum, stopped sales for the reduced demand. If more aluminum smelters move out, local prebaked anode producers in Shandong would be attacked, with those producers far from Weiqiao Aluminum in particular. In addition, prebaked anode producers in Shandong also consider moving their production lines to Yunnan.
Asian Metal: Chinese government issued regulations to control carbon emission recently, which forced some aluminum smelters to cut production. Will prebaked anode producers reduce production? As the biggest prebaked anode production region, what kind of opportunities and challenges will Shandong be faced?
Mr.Men: Carbon emission control is an important national policy of China and high-energy consumption industries would reduce production. Prebaked anode producers would cut production, if aluminum smelters cut production, and new prebaked anode projects would be controlled. However, Shandong would face both opportunities and challenges. Small prebaked anode producers might close while big producers would be strengthened by expanding investment in environment protection and reducing carbon emission. Besides, big producers could supply high quality products to meet the export market.
Asian Metal: Could you please introduce Chinese prebaked anode export market this year? As a major prebaked anode exporter, how about the export achievements byJining Carbon Group in H1, 2021? How did you cope with the increased shipping freight and COVID-19?
Mr.Men: In H1, 2021, China exported around 800,000t of prebaked anode and the overall export volume this year might reach 1.7 million tons, roughly 80% from Shandong. Our company exported around 72,000t in H1, up by 26% YoY, mainly delivering to Europe, America and Southeast Asia. We target around 180,000t in total this year, a 40-50% increase YoY, accounting for over 60% of our total production volume, up from 40% last year. As we export prebaked anode based on FOB deals, the increased freight did not attack us. However, the loading process slowed down for the short containers supply because of COVID-19.
Asian Metal: What are the advantages of Shandong, in terms of prebaked anode export?
Mr.Men: Firstly, Shandong enjoys good prebaked anode quality to meet strict request abroad, e.g. S 2.3%max V 200ppm; secondly, Shandong locates close to Tianjin,Qingdao and Lianyungang ports, which saves logistics cost; thirdly, Shandong has industrial cluster advantage. There are a total of five manufacturing prebaked anode exporters in China and four of them come from Shandong.
Asian Metal: What is your outlook for the prebaked anode demand abroad in the comingtwo years?
Mr.Men: Many overseas aluminum smelters are equipped with prebaked anode plants. I believe Chinese annual prebaked anode export volume would keep stable at around1.7 million tons in the coming two years, unless some prebaked anode producerscut production for equipment maintenance.
Asian Metal: Do you have any suggestions on Chinese prebaked anode industry development?
Mr.Men: Firstly, I suggest merging and reorganization, which would benefit carbon emissions and help prebaked anode producers reduce production cost by centralized procurement; Secondly, we should increase scientific research investment to develop low-carbon emission prebaked anode, for example, our Group has two state-standard laboratories for the research. Low-carbon-emission prebaked anode could last for 35-36 days, much longer than 28 days for normal prebaked anode.
AsianMetal: Again, many thanks for the interview and wish you bigger achievements in prebaked anode development.
