Graphite electrode: Demand side continues to be weak, some raw materials prices are falling

Under the influence of the continued weakness of downstream demand, graphite electrode market is currently quoted in confusion. The graphite electrode market is underperforming and prices are weak. In August, graphite electrode enterprises reduced their prices twice, with a price range of 2000-3000 yuan/ton. As of August 29, China's graphite electrode diameter is 300-600mm mainstream prices: RP graphite electrode 19000-21000 yuan/ton; HP graphite electrode 19000-22,000 yuan/ton; UHP graphite electrode 20,000-24500 yuan/ton; UHP 700mm graphite electrode 27,000-29,000 yuan/ton. Specific influencing factors are analyzed as follows:

1. Demand side continues to be weak, negative for graphite electrode market consumption

In August 2022, some regions were affected by high-temperature power limitation, and downstream markets capacity and output were limited, and the demand for graphite electrodes continued to weaken.

The poor performance of the terminal steel market has not improved. According to statistics from the China Iron and Steel Association, the economy of iron and steel industry showed a significant downward trend from January to July this year. In July, the whole industry suffered a monthly loss, and the enterprise efficiency dropped significantly. In addition, since mid August, due to the high temperature limit, the electric furnace steel plants in Southwest China (Sichuan, Guizhou, Yunnan and Chongqing) have basically stopped production, and silicon metal and yellow phosphorus construction starting has also been limited. Therefore, generally speaking, the downstream market is at a low level, which inhibits the consumption of the graphite electrode market.

2. Although some raw material prices have decreased, but the impact on the graphite electrode market is not obvious

Although the low sulfur petroleum coke showed a downward trend in August, Jinxi refinery currently implements 6800 yuan/ton. However, due to the long production cycle of graphite electrodes, the cost end was not able to have a certain impact on the current market price. In addition, the purchase price of most raw materials in the market was relatively high, so the cost pressure of graphite electrode enterprises has not eased. Moreover, needle coke price was in a high wave state, down 3.97% from July and up 31.14% from the beginning of the year.

Although graphite electrode raw materials price has decreased recently, the price decline of raw materials is smaller than the price adjustment of graphite electrodes. The loss of graphite electrode market continues,especially for some products with higher raw material prices.  The quotation in the graphite electrode market is a bit confusing and differs from the actual transaction price. It is understood that the actual trading center of ultra-high power 450mm graphite electrode is lower, and some low-cost resources are as high as 18,000 yuan/ton. For further analysis of graphite electrode market, feel free to contact us.