Raw material pressure--graphite electrode market is expected to rise

Graphite electrode price has been raised recently. As of February 25, 2022, the mainstream average price of China's graphite electrode market is 23286 yuan/ton, up 4.49% from the same period last week, 10.51% from the same period last month, 10.51% from the beginning of the year and 42.36% from the same period last year. 

The main influencing factors of the graphite electrode market price rise are analyzed as follows:

This month, the prices of low sulfur petroleum coke and needle coke in the upstream of graphite electrode rose comprehensively, especially low sulfur petroleum coke price increased several times during this month, compared with the end of January price increased about 600-700 yuan/ton, at present, Fushun and Daqing low sulfur petroleum coke price has reached 6900-7000 yuan/ton; Driven by the sharp rise of low sulfur petroleum coke, low sulfur calcined coke price rises synchronously. At present, some high-quality calcined coke price has reached 9500-10000 yuan/ton; Needle coke also rose this month, the current average market price of 10510 yuan/ton.

In addition, it is understood that under the support of positive factors such as stable demand for cathode materials, low sulfur petroleum coke and needle coke market price is still expected to rise, and the pressure on graphite electrode cost side is difficult to alleviate. 

Based on the current price of low sulfur petroleum coke, coal tar pitch and needle coke in the graphite electrode market, the production cost of graphite electrode enterprises is about 20000 yuan/ton, and the cost side continues to squeeze the profit space of graphite electrode enterprises. The upward range of graphite electrode price is still less than the increase of raw material price, graphite electrode market profit is still relatively limited.

At present, graphite electrode enterprises in Henan, Hebei, Shanxi, Shandong and other regions are under the Environmental protection control of the Winter Olympics. Enterprises are greatly affected by production restriction. Some enterprises have stopped production, and production is basically expected to resume at the end of February or early March.

The overall operation of the graphite electrode market is insufficient. Some graphite electrode enterprises reflected that some specifications of graphite electrodes are out of stock. Superimposed on the current high cost of the graphite electrode market, some graphite electrode enterprises are reluctant to sell, graphite electrode market supply tends to be tight.

At present, graphite electrode downstream steel plants are still in the resumption stage, and graphite electrode market demand is mainly based on early orders, with a small number of new orders. Due to the restrictions of the Winter Olympics and the reduction of crude steel production before the Spring Festival, graphite electrode stock is insufficient compared with previous years. With the resumption of steel plants, graphite electrode demand is better. In addition, the upward price of graphite electrode stimulated some steel plants and traders purchasing sentiment to a certain extent.

Future forecast: in the short-term graphite electrode market still executes early orders, but it is understood that some new orders transaction prices have risen, and the graphite electrode market has maintained a general upward trend. In addition, graphite electrode market has low inventory and high cost, graphite electrode price upward power still exists,  graphite electrode enterprise bullish expectations are obvious. In conclusion, graphite electrode prices are still expected to increase. Contact us to get the latest graphite electrode market dynamics.