Carbon Neutralization
-- Special Research Report on Graphite Electrode Industry 

The upstream raw materials of graphite electrode industry chain are mainly petroleum coke and needle coke. Raw materials account for a large proportion of the production cost of graphite electrode, accounting for more than 65%. The main downstream applications of graphite electrode are arc furnace steelmaking.

Since 2020, the price of graphite electrode has dropped and stabilized. It is expected that with the recovery of domestic and foreign markets and the growth of electric furnace smelting under the domestic carbon neutralization policy, the graphite electrode still have room for rise in the first half of 2021, and the price will remain stable in the second half of 2021.

From the perspective of supply and demand, in addition to China's expected increase in graphite electrode demand, overseas graphite electrode production capacity may be limited under the impact of the epidemic, which will further aggravate the tight supply pattern of graphite electrode. Demand for high quality UHP graphite electrodes grew to 580,000 tons in 2019, of which 66,300 tons were required, with a 68% CAGR in 2017-2019. Graphite electrode (especially HP graphite electrode) is expected to achieve supply-demand resonance driven by environmental protection production limit at the supply end and permeability of electric furnace steel at the demand end.

Due to the gradual decrease of the impact of COVID-19 on steel factories and other enterprises at home and abroad, the recovery of export demand and the low inventory of graphite electrode manufacturers, the operation rate of graphite electrode will continue to rise. It is expected that the price of ultra-high power graphite electrode will increase to 26,000 / ton in 2021, and the profit of the head enterprise will increase to 3,922-4,067 yuan/ton. As the total demand for UHP graphite electrodes continues to rise in the future, the profit margin will be further increased.

According to the current cost and market price, the current profit of RP graphite electrode is -264 to -1404 yuan/ton, which is in a loss state. With the continuous growth of scrap consumption, the demand for electric furnace steel increases rapidly, the demand for RP graphite electrode will also increase. RP graphite electrode prices are expected to rise above cost and become profitable in the third quarter of 2021, get more graphite news contact us.