Influence of Russia-Ukraine conflict on Chinese graphite electrode market

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

1、 Raw materials side

The war between Russia and Ukraine magnified the sharp fluctuations in the crude oil market. Under the background of low inventory and lack of global spare capacity, it may be that only the soaring oil price curbs demand. Due to fluctuations in the crude oil market, the prices of domestic petroleum coke and needle coke have risen in turn.

The price of petroleum coke fluctuates greatly. Jinxi Petrochemical raw coke price was 6000 yuan/ton, up 900 yuan/ton year-on-year, and that of Daqing Petrochemical was 7300 yuan/ton, up 1000 yuan/ton year-on-year.

In terms of needle coke, the largest increase in oil-based needle coke was 2000 yuan/ton. Domestic oil-based needle coke price for producing graphite electrode was 13000-14000 yuan/ton, with an average monthly increase of 2000 yuan/ton. The imported oil-based needle coke calcined coke price was 2000-2200 yuan/ton. Affected by oil-based needle coke, the coal-based needle coke price has also increased to a certain extent. Domestic coal-based needle coke price for producing graphite electrode was 11000-12000 yuan/ton, with an average monthly increase of 750 yuan/ton. The imported coal-based needle coke price for producing graphite electrode was $1450-1700/ton.

Russia is one of the world's top three oil producers, in 2020, Russia's crude oil production accounted for about 12.1% of the global crude oil production, and its exports were mainly Europe and China. In general, the duration of the Russian Ukrainian war in the later period will have a great impact on oil prices. If the "Blitzkrieg" changes to "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 oil price that was previously pushed up will face downward pressure. Therefore, the oil price will still be dominated by the situation in Russia and Ukraine in the short term. From this point of view, the late cost of graphite electrode is still uncertain.

2、 Export side

In 2021, China's graphite electrodes output was about 1.1 million tons, of which the total export volume was 425,900 tons, accounting for 34.49% of China's annual output of graphite electrodes. 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 exports in 2021 and 5.07% of China's annual output of graphite electrodes.

In the first three quarters of 2021, China's graphite electrode output was about 240,000 tons. From the perspective of environmental protection production restriction in Henan, Hebei, Shanxi, Shandong and other regions, 2022 first quarter output was about 40% decline year-on-year. In the first quarter of 2021, 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 furnaces, electric furnaces and non steel industries of graphite electrodes have resumed production one after another. In the mind of "buy when the prices are going up instead of going down", the small decline in exports may have a certain impact on the domestic graphite electrode market.

Therefore, in a comprehensive view, the cost is still the main factor affecting China's graphite electrode market in the short term, and the demand recovery plays a role in helping. Reading more GE international market reports, please follow us.