Analysts at China Merchants Securities Co.,Ltd. have released a report stating that major downstream clients for anode materials are gradually accepting price hikes, signaling a bottoming-out price recovery. This round of price recovery is primarily driven by tight supply and demand for graphitization, coupled with robust energy storage demand and limited new capacity additions, suggesting further potential for anode price increases. Concurrently, the advancement of direct green power connections and the easing of geopolitical conflicts are expected to alleviate pressure from electricity and raw material costs. It is anticipated that the profitability of the anode industry is set for a significant recovery, with leading companies possessing integrated operations likely to exhibit stronger profit elasticity. The key views from the report are outlined below.
Supply-Demand Tightness Fuels Anode Producers' Pricing Power
Since 2025, per-ton profitability for leading anode producers has remained under pressure. Recent increases in raw material costs combined with tight capacity have given these companies a strong incentive to raise prices. The graphitization segment has even less capacity flexibility than the anode segment, warranting close attention. Recent feedback from leading industry players indicates they are operating at full capacity, with third-party prices also rising by nearly 10% compared to the end of 2025. Given the strong demand from energy storage, a resilient off-season in July-August 2026, and limited short-term release of new graphitization capacity, the report anticipates that leading companies with integrated graphitization operations will be the first to benefit from this upward price cycle for anode materials.
Direct Green Power Connections to Reduce Electricity Costs
Recently, the National Development and Reform Commission and the National Energy Administration issued Document No. 688, ushering in an era of multi-user direct green power connections. Many regions have subsequently rolled out implementation plans. As of May, 99 direct green power connection projects have been approved domestically, with 24 provinces issuing supporting policies, corresponding to 34 GW of new energy installation capacity. For anode producers, the graphitization process is highly electricity-intensive, with power costs constituting a significant portion of expenses. Direct green power connections can facilitate the local consumption of low-cost wind, solar, and other green power. According to industry feedback, current projects utilize a 60% direct green power connection ratio, which can reduce costs by 1,200 to 1,500 yuan per ton for integrated anode products. Companies such as Binhai Energy, Shangtai Technology, and Gotion High-tech have already made arrangements, achieving a certain proportion of direct green power connection.
Easing Geopolitical Tensions Alleviate Raw Material Cost Pressure
In 2025, artificial graphite shipments reached 2.431 million tons, accounting for over 80% of total anode shipments. Petroleum coke is a crucial raw material for artificial graphite anodes, and its price fluctuations directly impact costs. Since 2025, petroleum coke prices have been on an upward trend, influenced by U.S. tariffs and rising crude oil prices due to Middle East geopolitical conflicts. Recently, with the easing of conflicts and the subsequent decline in oil prices, petroleum coke prices have fallen by approximately 10%, providing marginal relief for anode producers' raw material cost pressures.
Key Risk Factors
Potential risks include hindered downstream price transmission, escalation of geopolitical conflicts, and weaker-than-expected downstream demand.