Supply side and cost side are both positive, graphite electrode market price continues to rise

Today, the price of graphite electrode in China increased. By November 8, 2021, the average market price of China's mainstream graphite electrode was 21821 yuan/ton, up 2.00% from the same period last week, up 7.57% from the same period last month, up 39.82% from the beginning of the year, up 50.12% from the same period last year. This price increase is still mainly affected by the positive effects of cost and supply.

Cost Side: The overall price of raw materials upstream of graphite electrode still shows an upward trend. In early November, the price of low sulfur petroleum coke increased by 300-600 yuan/ton, driving the price of low sulfur calcined coke to rise sharply by 300-700 yuan/ton, and the price of needle coke increased by 300-500 yuan/ton; Although the price of coal tar pitch is expected to drop, the price is still high. In general, the cost of graphite electrode market is obviously pressurized.

Upstream raw material price list of graphite electrode (unit: Yuan/ton)

Supply Side: At present, the supply side of the graphite electrode market is tight as a whole, especially the ultra-high power and small and medium-sized graphite electrodes. Some graphite electrode enterprises say that the supply of goods is tight and there is a certain pressure on the supply. The main reasons are as follows:

1. The mainstream enterprises of graphite electrode mainly produce ultra-high power and large specification graphite electrode. The production of small and medium specification graphite electrode in the market is relatively small, and the supply of goods is tight.

2. The power restriction policies of all provinces are still being implemented, and the power restriction efforts in some regions have slowed down, but the overall commencement of the graphite electrode market is still limited. In addition, some regions have received the notice of environmental protection production restriction in winter, and under the influence of the Winter Olympic Games, the scope of production restriction has been expanded, graphite electrode output is expected to continue to reduce.

3. In addition, under the influence of power and production restriction, the resources of graphitization process are tight, on the one hand, lead to prolonged production cycle of graphite electrode. On the other hand, the rising cost of graphitization processing leads to an increase in the cost of some non-complete process graphite electrode enterprises.

Demand Side: At present, the overall demand side of the graphite electrode market is mainly stable. Under the influence of power restriction and production reduction, the overall operation of the steel plant downstream of the graphite electrode is insufficient, which affects the steel plant's attitude towards graphite electrode procurement. But affected by the tight supply of graphite electrode market, and the price of stimulation, the steel plant has a certain replenishment demand.

Export Side: It is understood that the performance of China's graphite electrode export market is better than that in the early stage, some graphite electrode enterprises feedback that export orders have increased. However, the Eurasian Union and EU anti-dumping still have certain pressure on China's graphite electrode export, and the overall performance of the export market is mixed with negative and positive factors.

Current Market Positive:

1. In the fourth quarter, some export orders were re-signed, and overseas enterprises needed to stock up in winter.

2. The export sea freight decreased, the tension of export ships and port containers eased, and the export cycle of graphite electrode decreased.

3. The final anti-dumping decision of the Eurasian Union will be formally implemented on January 1, 2022. Overseas enterprises of the Eurasian Union, such as Russia, will try to prepare goods in advance.

Final Decision Landing:

1. Under the influence of anti-dumping duty, the export price of graphite electrode increases, and some small and medium-sized graphite electrode export enterprises either turn to domestic sales or export to other countries.

2. According to some mainstream graphite electrode enterprises, although there are anti-dumping duties on graphite electrode exports, China's graphite electrode prices still have certain advantages in the export market, and China's graphite electrode production capacity accounts for 65% of the global graphite electrode production capacity, which plays an important role in the global graphite electrode supply. Under the condition of stable international graphite electrode demand, there is still demand for China's graphite electrode. In conclusion, it is expected that China's graphite electrode export may decrease slightly rather than significantly.

Future Forecast: Under the influence of power and production restriction, in the short term, the supply of graphite electrode market is tight and the downstream procurement is just needed. The current situation is not easy to change. Under cost pressure, graphite electrode enterprises are reluctant to sell. If the price of raw materials continues to rise, it is expected to drive the market price of graphite electrode to continue to rise steadily, with an increase of about 1000 yuan/ton, contact us to view more graphite electrode market trend.