Graphite electrode market maintains bottom support

In early December, some graphite electrode manufacturers raised their market quotations slightly, downstream steel plants reserved a small amount of inventory before the holidays. The production of graphite electrode is unprofitable, and there are few normal production enterprises. There are many reasons for the expected price rise of some enterprises; However, most enterprises said that the current supply and demand situation will not fluctuate significantly and will remain stable and surplus during the year.

As can be seen from graphite electrode price trend, since the beginning of November appeared a small increase of 500-1000 yuan/ton, the market began to restore stability. Ultra-high 700MM price is 29,000-31000 yuan/ton, ultra-high 300-600MM price is 2500-26500 yuan/ton; High power 300-600MM price is 21000-23000 yuan/ton. Due to the loss of downstream steel plants and low operating rate, there is a great resistance to price rise. In the near future, the increasing demand for raw materials by some steel mills before the New Year has brought some positive support to the weak graphite electrode market.

According to November statistics, the graphite electrode operation rate is only 25.8 percent.  As graphite electrode production has been in a loss state, after price was pushed up in November, although the profit has recovered to a certain extent, it is still in the inverted state of - 342 yuan/ton in November. In order to maintain downstream customer demand, mainstream enterprises produce under low load. Most small-scale enterprises produce graphite squares for anode market. Therefore, due to the recovery of steel demand, graphite electrode inventory will be reduced, the supply is tighter. In addition, the epidemic affected logistics, raw material freight increases and procurement is still difficult, so manufacturers have to slightly increase the quotation.

Demand for graphite electrodes in China is limited, and foreign markets have not performed well. According to customs data, the export volume of graphite electrode in October was 26200 tons, a decrease of 5.1% month on month. From the situation of graphite electrode export in the past year, the average monthly export from January to October was 288,000 tons, the cumulative total was 288,400 tons, down 15.84% year on year. Since the beginning of this year, global epidemic occurred frequently, economic downward pressure increased, the overall downturn in the steel industry aggravated losses, graphite electrode demand has also declined synchronously.

To sum up, graphite electrode market in December will still face poor production profit, low operating rate situation. At the same time, there are also some advantages. In the short term, there will be demand for raw materials in some downstream areas before and after the Spring Festival, but there will not be a large stock surge; In the long run, whether the policy guidance is conducive to the development of the steel market in the future, whether the future transportation will be smooth after the epidemic has been gradually controlled, whether the freight will decline, and a series of other issues, the industry is still in a wait-and-see attitude. Therefore, the stable wait-and-see sentiment of the graphite electrode market in December will become dominant, which does not rule out the possibility that market price will rise slightly. Welcome to contact us for more analysis on graphite electrode market before the new year.