【GE】Outlook for China's Graphite Electrode Market in 2025

【GE】Outlook for China's Graphite Electrode Market in 2025

In 2024, the Chinese graphite electrode market showed a trend of initial decline followed by recovery. Regular power graphite electrodes remained relatively stable throughout the year, with prices rising towards the end of the year. High-power and ultra-high-power graphite electrodes experienced a continuous decline in the first half of the year, with occasional price rebounds for ultra-high-power electrodes. Prices began to recover in the third quarter, though they remained below the year's high point. January marked the peak price, while September hit the year's lowest.

Price Review

1. First Quarter: Affected by environmental policies, graphite electrode manufacturers in Hebei, Shanxi, and Henan received shutdown or production limit notifications, causing most roasting and processing lines to stop. However, due to pre-holiday stockpiling, production reached a peak for the year, leading to a temporary market surplus. After the holidays, demand normalized, and graphite electrode prices began to fall.

2. Second Quarter: Slow recovery and ample stock from Q1 led to an oversupply, with some manufacturers reducing production. This resulted in continuous price declines.

3. Third Quarter: Due to decreased demand and reduced blast furnace and electric furnace operations, consumption of graphite electrodes dropped, and manufacturers focused on depleting inventories. Raw material price increases further pressured the price of graphite electrodes.

4. Fourth Quarter: As downstream production improved, demand for graphite electrodes rose, and the continued price increase of petroleum coke (a key raw material) led to higher production costs. Prices rose accordingly, with regular power electrodes reaching their highest point for the year, and ultra-high-power electrodes also showing recovery.

   

Overall, the Chinese graphite electrode market in 2024 was weaker, as the increase in raw material costs did not sufficiently drive price increases due to lower profits in the steel industry and reduced operating rates.

Cost and Profit Review

• Needle Coke: 2024 saw minimal fluctuations in needle coke prices, which increased by 200 CNY/ton. The demand from the anode material industry slowed, reducing the impact on ultra-high-power graphite electrodes.

• Petroleum Coke: In 2024, petroleum coke prices followed a weak, fluctuating trend and rebounded in October. This price increase led to higher production costs for graphite electrodes.

• Coal Tar Pitch: Despite maintaining stable production volumes compared to the previous year, coal tar pitch prices continued to fall in Q2 due to weak demand and low prices in the raw material coal tar market.

Looking at 2024 profits, the negative growth trend continued, with many manufacturers reducing production to mitigate losses, contributing to a general downturn in the market.

Supply and Demand Review

• Supply: In 2024, China's graphite electrode production reached 637,700 tons, with 331,800 tons exported, accounting for 52% of total production. The domestic production capacity for graphite electrodes was about 1.8 million tons, with effective capacity exceeding 1.4 million tons.

• Demand: The main application of graphite electrodes remains steelmaking, accounting for around 80% of total consumption. Domestic demand declined slightly in 2024, with crude steel production falling by 2.93% compared to 2023. Graphite electrode exports decreased by 9.48% year-on-year, influenced by international policies, with the major export markets being Russia, the UAE, and South Korea.

Outlook for 2025

• Raw Material Costs

• Price stability or slight increases in raw materials like petroleum coke, needle coke, and coal tar pitch will continue to support graphite electrode prices.

• Market Supply

• The expansion of graphite electrode production capacity will be cautious due to carbon neutrality goals and green policies, with large enterprises like Fangda Carbon planning some capacity expansion. However, small and medium-sized enterprises may face more survival pressure, possibly leading to increased market concentration.

• Market Demand

  1) Domestic: The electric arc furnace (EAF) steel sector is expected to drive demand growth. With national policies promoting short-process steelmaking, EAF steel production is forecast to rise from 10% to 15%-20% of total crude steel production by 2025. If crude steel production reaches 1 billion tons per year, the demand for graphite electrodes will likely reach 860,000 tons.

  2) International: Global steel demand is projected to rebound by 1.2% in 2025, driving a rise in global graphite electrode demand. However, trade restrictions and anti-dumping measures may affect China's exports.

• Market Sentiment

Manufacturers remain cautious, with some expecting stable demand. Steel mills are likely to maintain regular purchasing cycles, though stockpiling may not match previous years.

Overall Forecast for 2025

In the second quarter, demand for graphite electrodes is expected to rise, possibly reaching high points. The supply-demand imbalance may lead to more intense price competition. In the third and fourth quarters, the domestic market may see a gradual decline. However, international demand is expected to increase as global economic recovery and steel industry growth continue. Despite this, policy changes could impact the market, with graphite electrode prices expected to remain weak and stable in 2025.

(Source: MySteel Network)

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