Posted on 24 May 2021
China’s domestic graphite electrode prices have been up Yuan 1,000/tonne ($155/t) on month mainly due to the supply tightness as the country’s electric-arc-furnace mills have been ramping up their output on higher steel margins, market watchers commented Thursday.
As of May 19, Mysteel’s benchmark price of 600mm ultra-high-power (UHP) grade electrodes in East China’s Jiangsu province increased by Yuan 1,000/t on month to Yuan 26,000/t, and that of the 350mm diameter electrodes also gained by the same degree on month to Yuan 20,500/t, both including the 13% VAT, according to the database.
“China’s electric-arc-furnace (EAF) steelmakers’ appetite for graphite electrode remained strong, as most of them are still gaining quite a lot from their steel sales,” a Shanghai-based market watcher said.
For example, the margins of the 18 independent EAF mills under Mysteel’s regular survey averaged Yuan 724/t as of May 20, up Yuan 301/t on month.
Amid the high steel margins, the capacity utilization rate of the 71 EAF steelmakers across China under Mysteel’s survey gained for the third month by another 2.2 percentage points on month to 76.78%, or a new record high since the start of the tracking in January 2019.
China’s EAF mills have been operating at about 60% of their capacities most of the years in the past due to the lack of competitiveness in production costs with scrap against iron ore, but domestic steel prices had outpaced those of raw materials over April until May 12 to multi-year highs, enabling the country’s EAF mills to produce more steel too, Mysteel Global noted.
On the other hand, China’s domestic electrode supply has remained tight, as “some electrode plants in North China’s Inner Mongolia and Northwest China’s Gansu province have been forced to slow down operations because of the local energy rationing over January-March,” the market watcher said.
“Most of them had not been able to resume operations until mid-April, so they have had to rely on their limited inventories to fulfil the signed contracts, and now electrodes of certain specifications are out of stock now at some plants,” she said.
Electrode supply tightness is likely to last for a while as usually it takes about three months to complete one batch of graphite electrode production, and electrode offering prices, thus, may still stand chances for further increments, Mysteel Global understands.
Source:Mysteel Global
