Insufficient supply in the industry, graphite electrode prices continue to rise

Today, the price of China's graphite electrode market was raised. Under the condition that the cost of graphite electrodes continues to be high and pressurized, the profits of graphite electrode enterprises are limited, and some small and medium-sized graphite electrode enterprises independently control production. The graphite electrode market as a whole is under-operated and under cost pressure, the price of graphite electrodes continues to rise along with the prices of raw materials.

Insufficient supply in the industry and rising costs

The price increase of graphite electrodes is mainly affected by two factors. One is that the price of upstream raw materials drives the cost of graphite electrodes;

Since 2022, the prices of needle coke and petroleum coke, the upstream raw materials of graphite electrodes, have been raised several times. As of April 28, the price of low-sulfur petroleum coke has generally increased by 2700-3680 yuan / ton compared with the beginning of the year, with a comprehensive increase of about 57.18%. Since last year, affected by the booming anode material market, anode material enterprises have a large demand for graphitization processing and graphite crucibles, and some graphite electrode enterprises have switched to anode graphitization and anode crucibles under the influence of profits, resulting in the graphitization and roasting process of the graphite electrode market. OEM resources are tight, and the cost of graphite electrode graphitization increases.

Beginning in October last year, due to environmental protection production restrictions in autumn and winter and the impact of the epidemic, the start of the graphite electrode market continued to be limited. As of the end of March, the overall operating rate of the graphite electrode market was about 50%. Under the dual pressure of high cost and weak downstream demand, some small and medium-sized graphite electrode enterprises have insufficient production power. At the same time, in the first quarter, China's imported needle coke decreased by about 70% year-on-year, and the overall production of the graphite electrode market was insufficient.

Graphite electrode material is an important material for electric furnace steelmaking. Graphite used in steelmaking as an electrode material accounts for about 70% to 80% of the total amount of graphite electrodes in China. Since electric furnace steelmaking is more environmentally friendly than blast furnace steelmaking, in recent years, policies have mainly shifted to electric furnace steelmaking. In 2021, my country's electric furnace steel will account for 15% of the total crude steel output, an increase of 5 percentage points from 2020. The increase in the proportion of electric furnace steel will drive the demand for graphite electrodes. In the context of carbon neutrality, the proportion of electric furnace steel may increase rapidly; it is expected that the demand for graphite electrode industry will continue to rise.

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