【GE】Analysis of the Wide Price Increase in Ultra-High Power Graphite Electrodes

Recently, rising raw material prices have increased production costs for graphite electrode manufacturers, leading to a cumulative price increase of 1,300 CNY/ton for ultra-high power (UHP) graphite electrodes. Market bullish sentiment has surged—what are the key drivers?

1. Raw Material Analysis

Medium-temperature coal tar pitch: After the Spring Festival, prices rose by 200 CNY/ton, with current bulk material transaction prices at 3,900 CNY/ton (ex-factory, tax included). Downstream production recovery remains slow, keeping overall demand weak.

Petroleum coke: Post-holiday, calcined No. 2 petroleum coke prices surged by 1,180 CNY/ton due to increased production activity and rising orders from the anode materials sector, which is providing price support.

Needle coke: Oil-based needle coke prices increased by 700 CNY/ton after the holiday. Demand from graphite electrode manufacturers remains steady, while anode material producers actively procure raw materials, boosting demand.

2. Graphite Electrode Market Overview

Demand: Terminal demand remains weak, as EAF steel mill profits decline, reducing production enthusiasm and limiting support for graphite electrode consumption. Sales remain largely order-driven.

Raw Materials: Needle coke, petroleum coke, and coal tar pitch prices have all increased, significantly raising production costs.

Supply: Rising raw material costs have pushed up production expenses, and with slow demand recovery from steel mills, electrode manufacturers are primarily producing to fulfill existing orders.

3. Downstream Operating Rates

Electric Arc Furnaces (EAFs): Among 90 independent EAF steel mills, the average operating rate reached 19.78%, up 13.39 percentage points month-on-month and 13.11 percentage points year-on-year. The capacity utilization rate was 13.61%, down 10.34 percentage points month-on-month but up 10.9 percentage points year-on-year. Operating rates and capacity utilization are recovering, with further increases expected next week.

Other Industries: As of February 13, the operating rate of brown fused alumina smelting furnaces was 44.8%, rising 6.4 percentage points week-on-week. Increased operations in fused alumina plants have boosted graphite electrode demand, while post-holiday downstream recovery is gradually improving electrode consumption.

4. Market Outlook

With rising raw material costs, slow demand recovery, and increased production expenses, UHP graphite electrode prices have been forced up, and many manufacturers have paused quotations. The market is expected to remain firm with a slight upward trend in the near future.

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