[Graphite Electrodes] National Day Holiday Approaches, Steel Mill Restarts Surge: Can Graphite Electrodes Stage a Comeback?

Entering the traditional consumption season in September, as of September 13, 2024, the market price for regular, high-power, and ultra-high-power graphite electrodes ranged from 13,700 to 21,900 RMB/ton, with an average price of 15,313 RMB/ton, stable compared to the previous month but down 5.45% from the beginning of the year.

Graphite Electrode Price Range: Mainstream prices for 300-600mm diameter electrodes are as follows: regular power at 13,700-15,200 RMB/ton, high power at 14,200-16,700 RMB/ton, ultra-high power at 14,700-18,400 RMB/ton, and ultra-high power 700mm electrodes at 21,200-21,900 RMB/ton. 

Upstream Market:

· Low-sulfur petroleum coke: Prices at certain PetroChina refineries have recently risen slightly, mainly supported by demand from the aluminum industry. However, the upward momentum is limited due to weak demand in the graphite electrode market. As of September 13, the average price of low-sulfur petroleum coke was 2,273 RMB/ton, down 3.3% from the previous month, 13.84% from the beginning of the year, and 38.99% year-over-year.

· Low-sulfur calcined coke: The mainstream transaction price for low-sulfur calcined coke (using Jinxi and Jinzhou petroleum coke as raw material) was 3,000-3,200 RMB/ton. For Fushun petroleum coke, the ex-factory transaction price was 3,500-3,725 RMB/ton, while for Liaoning and Binzhou Zhonghai petroleum coke, the mainstream price was around 2,850-3,000 RMB/ton.

· Needle coke: Some needle coke manufacturers slightly increased prices earlier this month due to low inventory, but market-wide price follow-ups were difficult due to weak demand. With the negative electrode market trending downward, needle coke prices have remained stable. As of September 13, the average price of calcined needle coke was 7,585 RMB/ton, up 0.5% from last month, down 2.66% from the beginning of the year, and down 7.4% year-over-year.

· Coal tar pitch: After an earlier price adjustment, the coal tar pitch market saw a continued rise in quotations. However, due to limited acceptance from downstream markets, the price increase weakened in September, stabilizing. As of September 13, the average price of coal tar pitch was 4,389 RMB/ton, up 7.02% from last month, down 6.04% from the beginning of the year, and down 18.37% year-over-year.

Downstream Market:

· Steel mills: Prices for construction steel fluctuate frequently, and steel mills face profit pressure, reducing their motivation to increase production. Combined with weak seasonal demand, mill operating rates remain low. Demand has yet to be fully released in this traditional peak season, and few bids were seen for graphite electrodes this week. Some mills are pressing for lower prices to control costs.

· Silicon metal: Silicon production has declined this month, but overall output remains high, leading to stable demand for graphite electrodes. Silicon producers show little intention to stockpile and focus on just-in-time procurement.

· Yellow phosphorus: During the flood season, low electricity prices have kept production costs low, and yellow phosphorus output remains high, maintaining stable demand for graphite electrodes.

Market Outlook:

On the demand side, as the National Day holiday approaches, some steel mills are expected to restart production, although macroeconomic control and weak market demand limit the scope of production increases. Thus, demand for graphite electrodes is likely to remain in a just-in-time procurement pattern.

On the cost side, certain upstream raw materials for graphite electrodes are showing upward price trends, providing some support for price negotiations. However, this upward momentum is limited, and the expectation for price stability remains strong, suggesting little change in graphite electrode costs in the near term.

Currently, due to low transaction prices, graphite electrode manufacturers are less willing to sell. In the short term, the graphite electrode market is expected to remain stable.

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