Is graphitization capacity already in excess?

Since the fourth quarter, the graphitization processing price has continued to decline. What is the graphitization price trend next year? UHP graphite electrode made  of 100% needle coke, which is the best choice for EAF steelmaking.

The graphitization price generally shows a trend of "Increased firstly and then decreased".

Since the fourth quarter, with the gradual release of new capacity in the early stage, the graphitization market supply has increased, but the market demand has not increased significantly. The mainstream price of graphitization market has dropped from the high of 27000 yuan/ton to about 20000 yuan/ton.

In the first half of next year, a large amount of graphitization capacity will continue to be released, and the graphitization price will continue to decline, which is expected to drop to the cost line.

With the release of graphitization capacity increment and limited external processing capacity, prices are bound to fall.

Since the first quarter of 2022, due to environmental supervision in Inner Mongolia, some graphitization enterprises in Inner Mongolia have limited or delayed production, resulting in a decline in graphitizing output and a gradual rise in price; With the arrival of summer, Sichuan has entered a dry period. In addition, with the half month power rationing policy, the graphitization enterprises in Sichuan and Chongqing have basically stopped production, and the market price has reached a high level in the year.

Since the second half of the year, new graphitization capacity has been released, which is expected to continue until 2023. Graphitization market supply from tight to the current oversupply. The integration projects of the giant plants have been put into operation gradually, and the graphitization self-sufficiency rate has been continuously improved.

The graphitization market is oversupplied, but in the second half of the year, the downstream mainly reduces inventory, and the outsourcing processing volume is limited. The decline of graphitization price is an inevitable result. 

Future outlook

In the short term, with the continuous release of new graphitization capacity, the downward trend of graphitization price is inevitable, but it will return to stable prices later. In 2023 Q1 graphitization market mainstream price is expected to be 18,000 yuan/ton.

In the long run, the newly built anode material enterprises are mainly focused on the low-end market with low entry threshold. In the future, there will be a competition situation where supply exceeds demand; However, most of the leading manufacturers focus on the medium and high-end anode market with high threshold, such as the fast charging direction of the power market and the high-end energy storage market with continuous development and good prospects. In the future, the research and development direction of high-end anode products will pay more attention to high voltage solid, high capacity and other high performance requirements, and the price difference between high-end and low-end anode products will continue to expand. Welcome to follow us for more reports on graphitization industry.