Weak performance of the terminal market,  needle coke downstream procurement based on demand

Graphite electrode: with the recent rise of steel price, steel plants' profit has been restored, and the production enthusiasm has been improved compared with the previous period. However, under the influence of Southwest China power restrictions, production recovery has slowed down. It is reported that the EAF steel plants in Sichuan, Guizhou, Yunnan, Chongqing and other southwest provinces have basically stopped production, and the power limit is expected to last for about a week. 

The terminal EAF steel market production operation is not as expected, and the demand for graphite electrodes was not high. Most manufacturers take measures to stop  or reduce production to consume inventory. As of early August, graphite electrode operating rate was about 40.72%, the market performance was general, and the shipment volume of needle coke and cooked coke was also general, mainly based on demand. The market performance of calcined coke was weak in both supply and demand.

Anode materials: The market price is temporarily stable, but its bargaining power is mainly concentrated in the downstream power battery. In order to control the cost, raw materials' price is reduced. At the same time, petroleum coke price continued to decline, while the goods supply increased. Therefore, most anode material manufacturers took a wait-and-see attitude towards needle coke market. This year, the major anode material manufacturers are mostly located in the southwest market. Sichuan is an important gathering place for the new project of anode materials. The recent power cut-off period forced most enterprises to stop production, the total output of the industry fell, and the supply side tightened.

Related product market analysis

The low sulfur petroleum coke market overall performance is poor, the downstream graphite electrode market performance is general, the downturn of the steel plant market has not been improved, the steel plant overall operation is low, the demand side is unfavourable for graphite electrode consumption, meanwhile the overall wait-and-see mood of graphite electrode enterprises is becoming stronger and stronger. At the same time, although the production capacity of anode material market is rapidly expanding, it has limited support for the petroleum coke market. The inventory of some low sulfur coke refineries is high, and the market price is declining.

Future forecast

In the short term, needle coke prices will be strong operation:

• From the cost side, coal tar pitch and oil slurry prices will be high, the support of raw materials end is strong, and the space for further reducing profit is limited;

• From the supply side, most of the coal-based manufacturers will reduce production to consume the existing inventory, and the oil-based needle coke will continue to execute orders. In August, the market overall operating rate is expected to be about 50.08%;

• From the demand side, graphite electrode market will remain weak in the short term.

At present, the construction is low and the demand for calcined coke is general. and the anode material supply is tight under the influence of power limitation. Raw materials procurement will still be based on demand. To summarize, needle coke prices will be weak and stable. Contact us for the latest Steel & Iron market reports.