ChinaIOL data shows that in June 2026, China’s household air conditioner production totaled 17.76 million units, down 5.4% YoY; sales reached 18.195 million units, down 7.3% YoY. Of which, exports were 6.794 million units, down 7.1% YoY; domestic sales were 11.402 million units, down 7.4% YoY. According to the data, the market remains on a downward trajectory, but the overall decline is narrowing, and both domestic sales and exports are showing signs of recovery. Domestic Sales Market: Boosted by the 618 Shopping Festival, Downward Trend Narrows In the domestic sales market, the decline in household air conditioner shipments noticeably narrowed in June, mainly boosted by the 618 shopping festival, which helped destock online inventory and prompted some restocking among enterprises. However, terminal market performance during 618 still fell short of previous years. On the cost side, prices remained high and fluctuated, while end-user prices were still locked in fierce competition. Sales of mid- to high-end products have declined to some extent this year, the overall price structure of the market has been shifting downward, and enterprise profitability is facing considerable pressure. With June ending, some listed home appliance companies are about to release semi-annual reports, and driven by the pressure of financial reporting, enterprises are likely to sell more aggressively in June in an effort to give a good account to the market. Cumulative domestic sales in January–June reached 62.822 million units, down 5.6% YoY. As the data indicates, the overall domestic sales market in H1 remained under pressure, coming from persistently high costs and inventories on the one hand, and from the phasing out of state subsidies and diminishing marginal returns on the other. Consumers who have been ‘educated’ by low prices now have longer and more cautious purchasing cycles, which feeds back into the market as price involution across the industry. In such an environment, the industry is undergoing a new wave of reshuffling, and enterprises without orders or with poor profitability will be eliminated from the market. Export Market: Decline Narrowing in Sync, Localized Heatwaves Facilitate Destocking In the export market, although some regional markets have seen a partial recovery, exports still fell 7.1% YoY and 10.4% MoM. The dual decline was mainly due to some regions entering the off-season, coupled with accumulated inventory pressure, making overseas dealers less willing to restock. As high temperatures overseas gradually subside, market sales will slowly taper off, and the export scale is expected to return to around 5 million units by July. This is also part of the seasonal structural changes in household air conditioners; as the export off-season sets in, the focus will gradually shift back to the domestic sales market. Cumulative exports in January–June reached 52.703 million units, down 6.8% YoY. In H1 this year, the household air conditioner export market exhibited regional divergence and uneven recovery, with climate, inventory, economic, and policy cycle mismatches being the core influencing factors, while aftershocks of geopolitical conflicts and differing national policies further amplified market uncertainty. In addition, climate trends, inventory cycles, the pace of economic recovery, and changes in trade and energy efficiency policies in core countries vary across regions. Taking Europe as an example, the booming Western European market contrasts with the sluggish Eastern European market. Moreover, the data does not fully represent the overall market picture, and the characteristics of different markets need to be considered. The Western European market is dominated by rental housing, and coupled with local installation policy restrictions, extreme heat has boosted sales of portable air conditioners. In addition, market expectations regarding the weather are also driving growth. However, structural divergence remains pronounced. According to ChinaIOL, the inventory of split-type air conditioners in the Western European market is still saturated, and installation difficulties and environmental protection restrictions have been constraining the growth of split-type units.

[Iran] Strait sinking and tightened sanctions cripple Iran's semi-finished exports Amid escalating geopolitical tensions, the effective closure of the Strait of Hormuz and a new round of US naval activity from July 14, Iran's semi-finished import/export market was quiet this week. A bulk carrier loaded with 43000 tonnes of billet collided and sank in the Strait of Hormuz, adding shipping uncertainty and leaving many vessels stuck at anchorage or cancelling voyages, forcing all seaborne export tenders to halt. Some mills tried offers at 410-415 USD/tonne FOB, but international buyers largely withdrew, with only small billet truck deals booked at the Afghan border. Meanwhile tight supply lifted domestic billet to 423 USD/tonne, sharply inverting domestic and export prices.

SMM, July 16: Raw material side: This week, China's petroleum coke market held up well overall, with prices consolidating on a firm note and a strong bullish sentiment prevailing. Prices of petroleum coke across all specifications rose broadly, with low-sulphur petroleum coke showing a particularly clear upward trend. On the refinery front, CNOOC's Binzhou, Taizhou, and Huizhou Petrochemical plants generally raised their prices, providing strong support to the market. PetroChina's low-sulphur petroleum coke in north-east China saw steadily rising prices due to low inventory and active just-in-time procurement from downstream enterprises. Prices at Sinopec's refineries were largely stable. Disruptions arose as typhoon-related impacts halted loading and unloading operations at Shandong ports during the week, obstructing the arrival and discharge of imported petroleum coke. Downstream enterprises were forced to turn to domestically produced coke, leading to a concentrated release of domestic substitution demand. This directly boosted trading activity for local refineries, driving transaction prices continuously higher. SMM's latest data showed that the north-east China 1# petroleum coke spot price index closed at 4,327.53 yuan/mt, up 0.88% WoW from last Thursday. The Shandong 2# petroleum coke spot price index closed at 4,190.07 yuan/mt (up 3.17% WoW from last Thursday), Shandong 3# petroleum coke spot price index at 3,767.26 yuan/mt (up 2.77% WoW from last Thursday), and Shandong 4# petroleum coke spot price index at 2,018.56 yuan/mt (up 8.06% WoW from last Thursday). As the typhoon impact faded, Shandong ports gradually resumed operations and expectations for imported supply replenishment strengthened, cooling trading sentiment in the domestic petroleum coke market. The spot market is expected to enter a consolidation phase in the near term. The coal tar pitch market consolidated on a subdued note this week. As of this Thursday, the average price of coal tar pitch was 4,868 yuan/mt, down 2.41% WoW from last Thursday. The price trend of coal tar, a raw material, weakened, and further downside room is expected in the near term. The operating rate at deep-processing enterprises continued to rise. Downstream prebaked anode operating rates fluctuated at highs, but buyers persistently pushed for lower prices, making only just-in-time procurement. Shipments of carbon black faced pressure, leaving raw material purchasing enthusiasm insufficient. The supply-demand pattern in the market is relatively loose, and the coal tar pitch market is expected to consolidate on a subdued note in the near term. Overall, cost support for prebaked anode remained relatively firm this week. Supply side: Prebaked anode enterprises are maintaining a production pace of producing based on sales. New anode projects in Xinjiang, Guangxi and other regions are being commissioned successively, continuously releasing new capacity. Meanwhile, some enterprises saw their operating rates pull back slightly due to maintenance. However, overall, the industry's supply capability has steadily improved, further enhancing supply elasticity. Demand side: China's operating aluminum capacity stayed high, providing steady and rigid support for prebaked anode consumption. On the export front, new aluminum capacity in Indonesia continued to be commissioned, driving a MoM improvement in export orders for Chinese prebaked anodes to Southeast Asia. Geopolitical tensions in the Middle East have eased somewhat, and aluminum enterprises previously affected have begun to gradually resume production. This is expected to spur a recovery in anode procurement demand in the future. In summary, new supply of domestic prebaked anodes is being continuously realized, while high operating rates of downstream aluminum effectively underpin domestic demand. The export market is showing marginal improvement. Overall supply and demand for the industry remains stable, but as new capacity continues to be released, supply growth is slightly outpacing demand growth, leading to a more intense competitive landscape. Summary: The raw material market trends for China's prebaked anode industry clearly diverged this week: petroleum coke prices provided relatively strong support, while the decline in coal tar pitch prices exerted a limited drag on costs, resulting in an overall rise in comprehensive anode production costs. According to SMM monitoring, as of July 16, the cost of China's prebaked anode was 5,567.91 yuan/mt, up 1.28% WoW from last Thursday. Looking ahead, the cost support from the petroleum coke market remains relatively strong, while coal tar pitch prices are expected to consolidate on a weak note. Overall raw material support is moderate. In terms of supply and demand, high operating rates in China's aluminum industry support demand, and export orders are improving marginally. However, with the continued release of new capacity, industry competition will become increasingly intense. The fundamental pattern of supply growth slightly outpacing demand growth is likely to persist. Going forward, close attention should be paid to changes in the supply-demand pattern and price trends for prebaked anode and its upstream raw materials.

[SMM Weekly Magnesium Review: China Magnesium Market Retreats After Rapid Rise; Foreign Trade Remains Sluggish] This week, the magnesium ingot market in the main producing areas retreated after a rapid rise. At the beginning of the week, maintenance provided support to quotations, but downstream high inventory and fear of high prices suppressed transactions. Some producers offered discounts to sell, and magnesium prices weakened under pressure. Tianjin port FOB prices followed the decline of domestic EXW prices passively. Outside China, summer break led to weak demand, and high ocean freight rates suppressed transactions. Dolomite prices remained stable, with limited cost support. Magnesium powder and magnesium alloy followed magnesium ingot by falling first and then stabilizing. Downstream steel mill desulfurization, titanium sponge, and die-casting enterprises entered the off-season, with sluggish transactions. The oversupply pattern remained unchanged. In the short term, the magnesium market is expected to continue moving sideways.

[Iran] Strangled by escalating geopolitical tensions, the de facto closure of the Strait of Hormuz, and new US naval activity implemented since July 14, the Iranian semi-finished import/export market has seen muted trading activity this week. Crucially, a bulk carrier laden with 43,000 tonnes of steel billets collided and sank in the Strait of Hormuz, heightening maritime uncertainty and causing numerous vessels to back up at anchorages or cancel shipments entirely, leaving seaborne export tenders fully suspended. While some mills attempted to float offers at 410–415 USD/tonne FOB, international buyers have largely retreated from the market, leaving only isolated cross-border road deliveries of billets to the Afghan border. Meanwhile, driven by tight internal supply, domestic billet prices spiked to 423 USD/tonne, causing a severe inversion between domestic and export prices. Overall, the closure of shipping routes and the cutoff of import channels due to the new US lockdown are forcing Iranian steel mills to shift their limited resources entirely to the domestic market, leaving international semi-finished trade flows facing severe and prolonged disruptions in the short term.

Overall, the supply-demand fundamentals of the prebaked anode market are expected to remain stable in H2, but against the backdrop of continuous new capacity release, industry competition may intensify, and price trends will be more influenced by cost-side disruptions and downstream procurement pace.