LMM Global Steel Information Quick View (2021.10.14)
Recent changes in China’s graphite electrode market
At present, there is still a wait-and-see mood in the purchase of downstream steel mills of China’s graphite electrodes, and market transactions are still weak. However, due to the tight supply of the graphite electrode market and the high cost, graphite electrode companies are actively pushing up the price of graphite electrodes under the reluctance to sell, and the market price changes rapidly. The specific influencing factors are as follows:
- Under the influence of power curtailment, the supply of graphite electrodes in the market is expected to decrease
Statistics on the production of 48 mainstream graphite electrode companies across the country. Due to the strengthening of the power limit in the graphite electrode market, the overall monthly output is expected to decrease by 20,500 tons.
In addition, it is understood that some Chinese companies have received the autumn and winter environmental protection production restriction notice, and some graphite electrode companies cannot start some processes due to the winter weather, and the scope and restriction of the graphite electrode market will be further increased.
- The cost of graphite electrode market continues to increase
The prices of low-sulfur petroleum coke, coal pitch, and needle coke, the upstream raw materials of graphite electrodes, have risen across the board, and due to the upward impact of coal tar and oil slurry prices, imported needle coke and domestic needle coke are expected to continue to rise strongly, and the cost of graphite electrodes continues to increase at a high level. .
In addition, under the influence of electricity curtailment, the process cost of the graphite electrode market has increased, and the graphitization process of graphite electrode companies is more severely restricted. On the other hand, under the support of high profits for negative electrode graphitization, it seized market resources, and some graphite electrode graphitization companies switched to negative electrode graphitization. The superposition of two factors has led to the current shortage of graphitization resources in the graphite electrode market and the rise of graphitization prices. In addition, companies in some regions have received notices of production restrictions during the heating season. In addition to graphitization, roasting and other processes are also restricted. It is expected that the cost of some graphite electrode companies that do not have a full set of processes will increase.
- Freight for graphite electrode export ship
Recently, the freight rate of graphite electrode export ships has dropped, and some of the backlog of inventory at the port can be shipped. Due to the sharp increase in sea freight this year, some graphite electrode companies stated that freight costs accounted for about 20% of the export cost of graphite electrodes, which caused some graphite electrode companies to switch to domestic sales or ship to neighboring countries. Therefore, the decline in sea freight prices is good for graphite electrode companies to increase exports.
In addition, the final anti-dumping ruling of the Eurasian Union has been implemented and will formally impose anti-dumping duties on China’s graphite electrodes from January 1, 2022. Therefore, in the fourth quarter, overseas companies need to prepare in advance.