High-cost and low-margin, graphite electrode market under pressure

Graphite electrode market prices in China fell slightly this week. The market continues to remain weak in supply and demand. Under the dual impact of the off-season and the sharp drop in steel prices, electric furnace (EAF) steel plants losses intensified, which has increased the impact on the graphite electrode market. Graphite electrode market price has been lowered, however the market cost is high. Under the condition of high market cost and insufficient operation of graphite electrode, enterprises' profit margin is limited. 

Graphite electrode market supply is expected to shrink this week. Under the dual pressure of continuous weak demand for graphite electrode downstream and high production cost, some small and medium-sized graphite electrode enterprises have stopped production or reduced production since the middle and late May. In addition, due to the shortage of process resources and high processing costs in the anode material market, Some graphite electrode enterprises have changed production or have plans to change production due to profit attraction.

China's graphite electrode costs is still high this week. The cost side of graphite electrode market continues to remain stable, low sulfur petroleum coke and needle coke prices remains at a high level, the new order negotiation in the coal tar pitch market increases slightly. As we have learnt, currently low sulfur petroleum coke price for aluminum carbon production is rising, which may drive  low sulfur petroleum coke market for electrode production to a good trend. Overall, the cost of graphite electrode market is strong at a high level.

This week, China's graphite electrode market has little inventory pressure. At present, the shipment of graphite electrode market is blocked. Graphite electrode enterprises are unwilling to increase production and inventory. Small and medium-sized graphite electrode enterprises mainly produce by sales volume.

In the short term, graphite electrode market cost is strong at a high level, and market supply is expected to shrink, which still supports the willingness of graphite electrode enterprises to firm prices. In addition, some graphite electrode enterprises said that the current market demand is limited, and the stimulation effect of price reduction on shipment is also relatively limited. Considering the current situation of high costs and insufficient profits, the profit margin of graphite electrode enterprises is relatively limited, and graphite electrode prices are expected to remain stable in the short-term. For the latest report on the graphite electrode market, please pay attention to us.