This week (5 July – 9 July), China’s graphite electrode prices showed a slight correction trend.

Market Overview

Last week, domestic first-tier steel mills focused on bidding, and the price of graphite electrodes generally loosened. This week, the external quotations of the market have been adjusted to varying degrees, ranging from 1,000-2,500 yuan/ton. The market transactions are generally relatively thin.

This price drop is mainly affected by two factors:

  • First, after entering June, it is the domestic traditional steel market. Due to the excessive increase in steel in the first half of the year, it began to plunge sharply in June. The profit rate of electric furnace steel has also fallen from the previous highest of 800 yuan/ton to zero points. Some electric furnace steel plants have even begun to lose money, leading to a gradual decline in the operating rate of electric furnace steel and a decline in the purchase of graphite electrodes;
  • The second is that the manufacturers of graphite electrodes currently on the market have a certain profit. Affected by the sharp decline of petroleum coke raw materials in the early stage, it will have a certain impact on the mentality of market participants. Therefore, as long as there is a trend, the market will not lack price reduction.

As of July 8, the mainstream price of UHP450mm with 30% needle coke content on the market is 19,500-20,000 yuan/ton, and the mainstream price of UHP600mm is 24,000-26,000/ton, down 1,000 yuan/ton from last week. UHP700mm, The price is 28000-30000 yuan/ton, down 2000 yuan/ton.

Petroleum coke and needle coke market

Petroleum coke prices have rebounded this week. As of this Thursday, Daqing and Fushun coke are basically stable. Daqing Petrochemical 1#A petroleum coke is currently quoting 3100 yuan/ton, and Fushun Petrochemical 1#A petroleum coke is quoting 3100 yuan/ton, low-sulfur. Calcined coke is quoted at RMB 4100-4300/ton, up RMB 100/ton from last week. The domestic needle coke quotation was stable this week, but the actual transaction price has been loosened. At present, the mainstream quotation of domestic coal and oil products market is 8000-11000 yuan/ton, down 500-1000 yuan/ton from last week, and the transaction is relatively light.

Steel plant aspect

This week, domestic steel prices rebounded by about 100 yuan/ton, and the transaction situation has improved. In addition, some steel mills announced production restriction plans, and traders’ confidence has been restored. After continuous adjustments in May and June, the profits of most steel plants for construction steel are currently near break-even. Whether it is electric furnaces or blast furnaces, the number of active limited production overhauls has begun to increase in order to maintain a relative balance between market supply and demand. Due to the resumption of production by some electric furnace steel plants that had stopped production before the deadline, as of this Thursday, the capacity utilization rate of 92 independent electric furnace steel plants was 79.04%, an increase of 2.83% from last week.

Graphite electrode market prediction

There is not much room for price reduction of petroleum coke in the later stage. Needle coke is affected by cost and the price is relatively stable. The first-tier graphite electrode manufacturers have basically maintained full production, but the tight graphitization process in the market will continue, and processing costs will remain high. However, the production cycle of graphite electrodes is long, and with the support of high costs in the later stage, the room for the market price of graphite electrodes to fall is relatively limited.

Source:
https://www.sohu.com/a/476957984_193983?spm=smpc.author.fd-d.1.1626344937685pKeRVIi

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