Influence of Russia-Ukraine situation on China graphite electrode market

With the escalating conflict between Russia and Ukraine, as China's graphite electrode exporting countries, will Russia and Ukraine have a certain impact on China's graphite electrode export?

1. Raw materials side

The Russian Ukrainian war amplified crude oil market fluctuations. Under the background of low inventory and global surplus capacity shortage, perhaps only the sharp rise of oil price will curb demand. Affected by crude oil market fluctuations, domestic petroleum coke, needle coke prices have increased in turns.

After the festival, petroleum coke price showed three consecutive rises, even four consecutive rises. As of press time, Jinxi Petrochemical raw coke price was 6000 yuan/ton, up 900 yuan/ton year-on-year, and Daqing Petrochemical raw coke price was 7300 yuan/ton, up 1000 yuan/ton year-on-year.

Needle coke showed two consecutive rises after the festival, with the largest increase of oil-series needle coke up to 2000 yuan/ton. As of press time, domestic graphite electrode using oil-series needle coke cooked coke price was 13,000-14,000 yuan/ton, with an average increase of 2000 yuan/ton year-on-year. Imported oil-series needle coke price was 2000-2200 yuan/ton. Affected by oil-series needle coke, the price of coal-series needle coke has also increased to a certain extent. Domestic graphite electrode using coal-series needle coke price was 11,000-12,000 yuan/ton, with an average monthly increase of 750 yuan/ton year-on-year. The price of imported graphite electrode using coal-series needle coke and cooked coke was 1450-1700 US dollars/ton.

Russia is one of the world's top three oil producers, accounting for 12.1% of global crude oil production in 2020, with exports mainly to Europe and China. In general, the duration of the Russia-Ukraine war in the later period will have a great impact on oil prices. If the "blitzkrieg" war turns into a "sustained war", it is expected to have a sustained boosting effect on oil prices; If the follow-up peace talks proceed smoothly and the war ends soon, the previously pushed up oil prices will face downward pressure. Therefore, oil prices will still be dominated by the situation in Russia and Ukraine in the short term. From this point of view, graphite electrode cost is still uncertain in the later stage.

2. Export side

In 2021, China's output of graphite electrode was about 1.1 million tons, of which the total export was 425,900 tons, accounting for 34.49% of China's graphite electrode annual output. In 2021, China exported 39,400 tons of graphite electrodes to the Russian Federation and 16,400 tons to Ukraine, accounting for 13.10% of the total export volume in 2021 and 5.07% of China's graphite electrodes annual output.

In the first three quarters of 2021, China’s graphite electrode output was about 240,000 tons. In terms of environmental protection production limits in Henan, Hebei, Shanxi and Shandong, the output in 2022 first quarter may decrease by about 40% year-on-year. In 2021 first quarter, China exported 7900 tons of graphite electrodes to the Russian Federation and Ukraine, which actually accounted for less than 6%.

At present, the downstream blast furnace, electric furnace and non-steel industries of graphite electrode have resumed production one after another. In the mind of "Running after Rising and Falling", the export has decreased slightly, or it is difficult to have a certain impact on the domestic graphite electrode market.

Therefore, in general, the cost is still the main factor affecting China's graphite electrode market in the short term, and the demand recovery is combustion-supporting , more graphite market forecast chat with us.