Posted on 18 Mar 2022
Market participants are optimistic about China's graphite electrode market over the near term, pointing to the revival in demand from both domestic and overseas buyers, as well as the support prices are gaining from the persisting high prices of raw materials, Mysteel Global has learned.
As of March 16, Mysteel's benchmark price for 600mm ultra-high-power (UHP) grade electrodes in East China's Jiangsu was hovering high at Yuan 26,700/tonne ($4,205.3/t), up Yuan 500/t on month, while the price of 400mm diameter electrodes had also increased by a larger Yuan 1,000/t on month to Yuan 22,500/t, both including the 13% VAT.
With more independent electric-arc-furnace (EAF) steelmakers recovering operations to their normal levels, their demand for electrodes has also increased, Mysteel Global noted.
In tandem, the capacity utilization rate of the 85 independent EAF steelmakers across China under Mysteel's regular survey recovered to 67.07% as of March 10, up 3.73 percentage points on week. Given that this time last month, most EAF mills were just restarting work after their long Chinese New Year break, the March 10 run-rate was also higher by a huge 65.13 percentage points from February.
Besides the uptick in purchases from domestic mills, recent demand from overseas buyers has also increased, Mysteel Global understands.
"Due to the ongoing Russia-Ukraine conflict, inquiries from European electrode buyers have increased," a Shanghai-based market watcher told Mysteel Global, adding that the anticipation of further rises in overseas demand is encouraging some domestic electrode plants to raise their offering prices.
At the same time, the high price of electrode raw materials is another factor ensuring that electrode prices hover high, according to Mysteel's survey.
For example, as of March 16, the offering price for needle coke, the main raw material for graphite electrodes, had risen to Yuan 13,000/t, or a new high since November 2019, according to Mysteel's tracking.
Moreover, "the increase in needle coke seems likely to continue for a while," the Shanghai analyst commented, predicting that it is expected to rise by at least another Yuan 500/t in the near term.
Source:Mysteel Global
