【Graphite Electrodes】Price Stability Amid Raw Material Increases and Steel Mill Restarts

At the start of September, the graphite electrode market prices remained stable. The primary changes were seen in the increase in production rates and strategic adjustments by some companies. As the steel market enters its traditional peak season ("Golden September, Silver October"), some electric arc furnace (EAF) steel mills in East China and Southwest China have resumed production.

As of September 6, mainstream quotes for UHP400mm electrodes were between 15,000-16,000 RMB/ton, UHP450mm with 30% needle coke content ranged from 14,500-15,000 RMB/ton, UHP600mm from 17,000-18,000 RMB/ton, and UHP700mm from 20,500-21,500 RMB/ton.

Raw Materials

This week, producers of needle coke raised prices for calcined coke, while certain petroleum coke resources saw slight adjustments. The upstream raw material prices continue to provide strong support.

Supply

The graphite electrode industry is showing signs of a recovery in production. The main reason is that raw material prices hit relatively low levels in August. Some graphite electrode companies, which had temporarily shut down due to high costs or weak market demand, saw an opportunity. These companies assessed the current raw material price levels and forecasted a potential increase in raw material costs, considering it an ideal time to restart production at a lower cost.

To quickly recoup funds, some companies chose to sell their inventory of graphite electrodes at more favorable prices to steel mills. After securing the necessary cash flow, these companies began purchasing raw materials at the currently lower prices, preparing to fully resume production.

At the same time, with graphite processing prices continuing to fall, some companies specializing in graphitization are offering outsourcing services to graphite electrode manufacturers.

Demand

As the steel market enters its traditional peak season and steel mill profits gradually recover, some blast furnace enterprises are planning or have already resumed production. This is helping to improve the overall operation rate of blast furnaces. Additionally, with scrap steel prices declining and losses narrowing for steel mills, some EAF enterprises are planning to restart production at low levels. Given these positive factors, it is predicted that demand for graphite electrodes will increase in the fourth quarter. As of September 5, domestic steel mills' daily consumption of graphite electrodes was 853 tons, a 0.85% increase from the previous week.

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