Graphite Electrode:

Price is expected to stop falling and rebound; part of graphite electrodes graphitization capacity is transformed into negative graphitization capacity！

—— Market reluctant sale appeared, graphite electrode prices are expected to rebound.

Under the high cost of graphite electrode and light downstream demand, recent graphite electrode market sentiment differentiation. On the one hand, the recent market supply and demand is still in an unbalanced game state, and some graphite electrode enterprises still have a strong willingness to ship and destock; On the other hand, the production cost of graphite electrode is high and the overall profit of the market is insufficient. In order to avoid cost inversion, graphite electrode enterprises are also willing to stabilize the price. 

As of September 6, 2021, China mainstream price of graphite electrode 300-600mm diameter is: RP is 15000-18000 yuan/ton; HP 17000-20500 yuan/ton; UHP 17000-25000 yuan/ton; UHP 700mm graphite electrode 27000-30000 yuan/ton. The average market price of mainstream graphite electrode in China was 20,286 yuan/ton, down 7.49% from the same period last month, up 29.98% from the beginning of the year and up 54.10% from the same period last year.

High pressure on graphite electrode cost:

1. The prices of needle coke and coal tar pitch in the upstream of graphite electrode are high, and the price of low sulfur petroleum coke continues to rise, driving the increase of cost pressure of graphite electrode.

2. Affected by power limit in Inner Mongolia, floods in Henan and other factors, and attracted by the high profit of negative electrode graphitization, part of graphite electrode graphitization capacity is converted to negative graphitization capacity,  graphite electrode graphitization resources are tight, and the costs of graphite electrode baking and graphitization processing have increased.

The overall supply sentiment of graphite electrode market is differentiated. Since the price of low sulfur petroleum coke fell in May, some small and medium-sized graphite electrode enterprises have reduced production under the influence of market wait-and-see sentiment. From July to September, in the off-season of the graphite electrode terminal material market, meanwhile, the raw material prices continued to rise, Some graphite electrode enterprises have plans to save and reduce production, and the early-stage capacity of the graphite electrode market is gradually consumed.

♦ Some major factories have been active in the early stage of production and recently released production capacity, focusing on active shipment, but the customers of mainstream graphite electrode enterprises are relatively stable and there is basically no pressure on shipment.

♦ The market share of some small and medium-sized graphite electrode enterprises is low. In addition, affected by the off-season of terminal demand, enterprises mainly ship actively, and the transaction price of individual orders is slightly lower than the market.

♦ Some graphite electrode enterprises with stable production and sales and low inventory have obvious reluctance to sell under cost pressure. In order to avoid cost inversion, some enterprises have slightly increased the price of graphite electrode.

Graphite electrode demand is expected to improve.

On the one hand, part of the electric furnace steel factory early procurement of graphite electrode inventory gradually consumed. It is reported that some electric furnace steel mills have procurement plans in the near future.

On the other hand, with the upstream raw material price of graphite electrode continues to rise, some electric furnace steel factories and some graphite electrode traders believe that the price of graphite electrode is close to the rebound node, graphite electrode downstream actively take goods. However, under the cost pressure of graphite electrode enterprises, there is reluctance to sell.

In addition, the high temperature weather in summer will pass, and the off-season of graphite electrode terminal product market will pass. The recent period of snail, product trend is strong, boost the market, electric furnace steel operation rate has a small rise, the graphite electrode demand increased.

Future forecast:

Recently, the downstream enterprises of graphite electrode actively take goods at the bottom, meanwhile the cost of graphite electrode is high, and there is a certain reluctance to sell in the graphite electrode market. Under the situation of cost pressure and good demand in the downstream metal silicon market, the prices of RP and HP graphite electrodes have rebounded first, and individual graphite electrode enterprises with low inventory have also slightly increased the prices of UHP graphite electrodes. With the further consumption of graphite electrode market inventory, it is expected that the price of graphite electrode may stop falling and rebound after the end of steel bidding in mid September, contact us for more market forcast and guidance.