The latest price trend of graphite electrodes

Beginning in October last year, due to environmental protection production restrictions in autumn and winter and the impact of the epidemic, the start of the graphite electrode market continued to be limited. As of the end of March, the overall operating rate of the graphite electrode market was about 50%. Under the dual pressure of high cost and weak downstream demand, some small and medium-sized graphite electrode enterprises have insufficient production power. At the same time, in the first quarter, China's imported needle coke decreased by about 70% year-on-year, and the overall production of the graphite electrode market was insufficient.

Graphite electrode material is an important material for electric furnace steelmaking. Graphite used as electrode material for steelmaking accounts for about 70% to 80% of the total amount of graphite electrodes in China. Since electric furnace steelmaking is more environmentally friendly than blast furnace steelmaking, in recent years, policies have mainly shifted to electric furnace steelmaking. In 2021, my country's electric furnace steel will account for 15% of the total crude steel output, an increase of 5 percentage points from 2020. The increase in the proportion of electric furnace steel will drive the demand for graphite electrodes. In the context of carbon neutrality, the proportion of electric furnace steel may increase rapidly; Guotai Junan expects that the demand for graphite electrodes will continue to rise.

At present, the supply and demand of the graphite electrode market are weak, and the graphite electrode enterprises are under the pressure of insufficient operation and high cost. However, due to the restriction that the downstream demand has not seen a significant improvement, the increase in the price of graphite electrodes is limited. Therefore, on the whole, the price of graphite electrodes has gradually implemented the current increase. Under the situation that the cost and demand of graphite electrodes are expected to increase, the price of graphite electrodes is still likely to rise.