EU has made a final ruling on the anti-dumping of graphite electrodes

The EU has made a final ruling on the anti-dumping case of graphite electrodes in China.

On April 7, the European Commission (hereinafter referred to as the European Commission) announced that it had made a final affirmative anti-dumping ruling on graphite electrode systems originating in China, and imposed 23%-74.9% anti-dumping duties on the products involved from the 8th.

The dumping and damage investigation period in this case is from January 1, 2020 to the end of 2020, and the damage investigation period is from January 1, 2017 to the end of the dumping and damage investigation period.

Except for some graphite electrodes that are rarely produced in the EU, there are four carbon enterprises under Liaoning Fangda Group Industrial Co., Ltd., Liaoning Dantan Technology Group Co., Ltd. (hereinafter referred to as Liaoning Dantan), and three companies under Nanjing Yangzi Carbon Group. Products exported by companies to the EU will be subject to anti-dumping duties.

Graphite electrode is a high temperature resistant graphite conductive material, which is an important consumable material for steelmaking, silicon smelting and yellow phosphorus smelting.

Data from Guosheng Securities shows that the pattern of domestic graphite electrode enterprises is relatively scattered. As of the end of 2022, Fangda Carbon New Material Technology Co., Ltd. (600516.SH, hereinafter referred to as Fangda Carbon) has an annual production capacity of 295,000 tons of graphite electrodes, with a market share of 17.18%. three times.


Source: European Commission
The 31-page announcement issued by the European Commission detailed the arguments and arguments of various parties including the China Chamber of Commerce for Electromechanical Industry (CCCME), the European Iron and Steel Association (Eurofer), importers, and Chinese exporters in the adjudication process.

The plaintiffs in this anti-dumping lawsuit are the European Iron and Steel Association, France's Imerys, Russia's Novolipetsk Steel Company (NLMK) European Department, and MISANO, etc.; Large carbon and other enterprises.

An unnamed Chinese business person told Jiemian News that China has always been actively responding to the lawsuit, and it is inconvenient to disclose the final ruling and related impacts.

On February 17, 2021, in response to the applications submitted by three EU companies on January 4 of that year, the European Commission initiated an anti-dumping investigation on graphite electrode systems originating in China.

On October 15 of that year, the European Commission made an affirmative preliminary ruling on anti-dumping in the case.

The European Commission believes that the increase in China's exports to Europe has harmed related industries in Europe. In 2020, due to the decline in steel production capacity and the epidemic, the demand for carbon in Europe declined, but the number of goods imported from China increased by 12% year-on-year, with a market share of 33.8%, an increase of 11.3 percentage points; 61.1% in 2020 fell to 55.2% in 2020.

The investigation of the case involved multiple reference standards such as product overlap, the source and cost of petroleum coke, transportation costs, electricity, and calculation methods. Chinese entities such as the China Chamber of Commerce for Electromechanical Industry, Fangda Group, and Liaoning Dantan all raised questions and believed that the European Commission There are distortions in the standards used.

Case investigation involves multiple reference dimensions such as product overlap. China Chamber of Commerce for Electromechanical Industry, Fangda Group, Liaoning Dantan and other Chinese entities have all raised doubts, arguing that the standards adopted by the European Commission are distorted.

However, most of the demands were rejected by the European Commission on the grounds that Chinese companies did not propose better or undistorted benchmarks or standards.

China is a major exporter of graphite electrodes. Everbright Securities pointed out that in recent years, overseas anti-dumping investigations on China's graphite electrode exports have continued. This is due to the low price of domestic graphite electrodes and the gradual increase in quality, and the export volume has increased year by year.

Since 1998, India, Brazil, Mexico and the United States have successively conducted anti-dumping investigations and imposed anti-dumping duties on Chinese graphite electrodes.

According to the report of Everbright Securities, the main export regions of China's graphite electrodes include Russia, Malaysia, Turkey, Italy, etc.

From 2017 to 2018, overseas graphite electrode production capacity was gradually withdrawn. Companies such as GRAFTECH in the United States and SGL in Germany continued to reduce production capacity, and closed three foreign factories respectively, reducing the production capacity by about 200,000 tons. The gap between overseas supply and demand intensified, driving China's graphite electrode exports. Demand picks up.

Everbright Securities predicts that China's graphite electrode export volume is expected to reach 498,500 tons in 2025, an increase of 17% over 2021.

According to Baichuan Yingfu data, the domestic graphite electrode production capacity in 2021 will be 1.759 million tons. The export volume was 426,200 tons, a significant increase of 27% year-on-year, the highest level in the same period in the past five years.

The downstream demand for graphite electrodes is mainly concentrated in four industries: electric arc furnace steelmaking, submerged arc furnace smelting yellow phosphorus, abrasives and industrial silicon, among which electric arc furnace steelmaking has the largest demand.

According to statistics from Baichuan, the demand for graphite electrodes in the steel industry will account for about half of the total demand in 2020. If only domestic demand is considered, graphite electrodes consumed by electric arc furnace steelmaking account for about 80% of the total consumption.

Everbright Securities pointed out that graphite electrodes belong to the industry with high energy consumption and high carbon emission. With the transformation of policies from energy consumption control to carbon emission control, the supply and demand pattern of graphite electrodes will usher in a significant improvement. Compared with long-process steel mills, short-process electric furnace steel has obvious carbon control advantages, and the demand for graphite electrode industry is expected to increase rapidly.