China needle coke market forecast under the double carbon background

The role and significance of needle coke industry in achieving carbon neutrality and carbon peaking goals

Needle coke is mainly used in the production of graphite electrode for electric furnace steelmaking and lithium ion battery anode.

Graphite electrode is the largest downstream product of needle coke at present. Steel industry is the largest carbon emission manufacturing industry in China, accounting for 15% of the national carbon emissions. The energy consumption and emissions of electric furnace steelmaking are 50% that of traditional converter. In order to achieve the goal of carbon peaking and carbon neutralization, energy conservation and emission reduction in the steel industry bear the brunt. It is imperative to increase the proportion of electric furnace steelmaking in the steel industry. According to the World Iron and Steel Association, the world's annual crude steel output in 2021 is 1,950.5 billion tons. Electric furnace steel has more than 400 million tons, accounting for about 25%. In 2020, the proportion of electric furnace steel in China was 9.1%, far lower than that in developed countries such as the United States, the European Union and Japan, and far lower than the world average level of 40% (except China). There is huge room for development.

Lithium battery is mainly used as power battery and energy storage battery of electric vehicle, and has been widely used. Compared with fuel vehicles, electric vehicles have higher energy conversion efficiency and no carbon dioxide emissions during use. The global electric vehicle industry is developing rapidly. According to statistics, in 2021, the global cumulative sales of electric vehicles was nearly 6.5 million, an increase of 108% over the previous year.

China needle coke industry current situation and market forecast

（1） History and current situation

Since the 1970s, China has begun to carry out research on oil and coal based needle coke, and has made beneficial experience and significant progress. Especially in recent years, with the smooth operation of oil based needle coke units such as Shandong Yida and Shandong Jingyang, and coal based needle coke units such as Shanxi Hongte and Shanxi Jinzhou Chemical, the output and capacity of needle coke in China have gradually expanded, and the product quality has significantly improved, basically replacing most of China's imported products. In 2020, China's consumption of needle coke was 740,000 tons, of which 233,000 tons were imported and 10,000 tons were exported. Imported needle coke is mainly high-end products such as graphite electrode nipple coke. There is still a gap in the supply of high-end needle coke in China, and the industry has broad prospects for development.

（2） Market forecast

Different from traditional blast furnace steelmaking, electric furnace steelmaking uses scrap steel as the main raw material, and uses high temperature arc melting generated by high current of graphite electrode. Graphite electrode is the core component of electric furnace steelmaking. The consumption of graphite electrode per ton in electric furnace steelmaking is directly related to the type of electric furnace. At present, the mainstream domestic electric arc furnace consumes about 3kg graphite electrode per ton of steel, and the imported electric arc furnace consumes about 2kg graphite electrode per ton of steel. Graphite electrode is divided into high power graphite electrode and ultra-high power graphite electrode. Each ton of high power graphite electrode requires 0.8 tons of needle coke, and each ton of ultra-high power graphite electrode requires 1.05 tons of needle coke. In 2020, the consumption of needle coke in China's graphite electrode market will be about 400,000 tons. In January 2022, the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Ecology and Environment jointly issued the Guiding Opinions on Promoting the High Quality Development of the Iron and Steel Industry, which proposed to increase the proportion of electric furnace steel to 15% by 2025. According to this estimation, China's demand for high-power graphite electrodes is expected to reach 600,000 tons in 2025.

With the rapid development of China's lithium-ion battery industry, the proportion of lithium-ion batteries in the consumption structure of needle coke continues to increase, which is expected to surpass the graphite electrode to become the largest needle coke consumption market in the next five years. The power battery represented by electric vehicles is the largest engine for the rapid growth of lithium-ion batteries. At present, different brands and models of electric vehicles have different power battery capacity, which is generally between 40 KWH and 90 KWH. Due to the different processes of various manufacturers, there is also a gap between the needle-coke per ton of artificial graphite anode, which is about 1 ton to 1.05 tons. 1kwh lithium battery needs about 1.3kg-1.4kg anode, so each electric vehicle power battery needs 52kg-126kg of anode material, and the corresponding needle coke should be 52kg-132kg. According to statistics, the cumulative global sales of electric vehicles reached nearly 6.5 million in 2021, an increase of 108% over the previous year. Therefore, it can be concluded that the amount of needle coke consumed by electric vehicle power batteries in 2021 is between 330,000 tons and 850,000 tons. In 2020, the shipment of lithium battery in China was 158GWh, the output of lithium ion battery anode was 460,000 tons, and the consumption was 340000 tons. In 2025, China's lithium battery shipments are expected to exceed 450 GWh, with the consumption of needle coke exceeding 800,000 tons. Market report of needle coke at home and abroad, feel free to contact us