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Graphite Electrode Market Review And Outlook In March 2021

Market Overview

The graphite electrode market is showing a steady upward trend. Driven by the increase in raw material prices and the tight supply of ultra-high-power small and medium-sized graphite electrodes in the market, the price of graphite electrodes maintained a steady growth in January and February, generally at 500-1000 yuan/ton. Beginning in March, enterprises such as the downstream electric furnace steel plants gradually resumed production, and steel plants bidding began one after another. In mid-to-late March, steel plants’ procurement activities continued to be bloomed. The downstream demand for graphite electrodes developed steadily. At the same time, stimulated by the continuous high growth in the price of graphite electrode raw materials, some graphite electrode companies have also seized the opportunity to reverse their profit and loss. The price of graphite electrodes has seen a large increase, generally in the range of 2000-3000 yuan/ton.

1. The price of raw materials is high, and the cost of graphite electrodes is under pressure

The raw material prices of the graphite electrode market have entered an upward channel since September 2020, and the prices of graphite electrode raw materials have increased sharply in the first quarter of this year. In particular, low-sulfur petroleum coke and needle coke were affected by mainstream refinery maintenance, under-operation and other factors, and both had an increase of more than 45% compared with the beginning of the year. Affected by the price of low-sulfur petroleum coke, the price of low-sulfur calcined coke is also rising.

In late March, the price of graphite electrode raw materials has reached a relatively high level, and some downstream companies have indicated that it has been difficult to bear the current raw material prices. Graphite electrode companies said that although the price of graphite electrodes has experienced several rounds of increases, it is still not as high as the cost pressure caused by the upward price of upstream raw materials.

2. The Supply Side Is Tight

The graphite electrode market still maintains a tight supply pattern of some resources (UHP550mm and small items). Some graphite electrode suppliers' orders have been scheduled to May. The tight supply of graphite electrode market is mainly affected by the following factors

1). The price of graphite electrode raw materials is high, and it is difficult for enterprises to bear it. And some graphite electrode companies said that there is a certain risk in production at this time, so companies are unwilling to produce more to increase their own inventory pressure.

2). Graphite electrode suppliers expect to maintain the current supply and demand pattern in order to maintain the steady growth of graphite electrode market prices.

3). The production cycle of graphite electrodes is long, and the impact on the supply of graphite electrodes in the graphite electrode market is limited in the short term.

3. Overall demand for graphite electrodes is improving, and downstream purchases are on the sidelines

In March, the downstream steel mills of graphite electrodes continued to bid, and the market was gradually active, and the demand for graphite electrodes was improving.

Affected by the slightly larger increase in the price of graphite electrodes, there is a certain wait-and-see attitude among downstream companies of graphite electrodes recently, and purchases are mainly based on rigid demand. However, due to the tight supply of graphite electrodes, downstream companies have a better attitude towards graphite electrode purchases.

The background of "carbon neutrality" is good for electric furnace steel companies, and the demand for graphite electrodes is good in the medium and long term.

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