【Real stuff】China graphite electrode industry competition pattern and development trend

In recent years, the Chinese government has issued a series of policies to reduce excess steel capacity, such as the Opinions on Solving Excess Capacity in the Steel Industry and Realizing the Development of Poverty Relief. The implementation of these policies has replaced the backward crude steel capacity (such as the use of 400 cubic meters or less blast furnace steelmaking) by electric arc furnace steelmaking, greatly stimulating demand for graphite electrodes in China's steel industry.

Ⅰ. Analysis on China's graphite electrode industry competitive pattern

1. Market share

At present, China's graphite electrode industry concentration is low. In 2021, industry CR5 accounts for about 30% and CR10 accounts for about 48%, of which, Fangda Carbon as the industry leader, accounted for only about 13%. The main products include graphite electrode, carbon brick for blast furnace, graphite cathode carbon block for electrolytic aluminum, special graphite products, carbon/graphite materials for nuclear power, graphene and other carbon products.

Except for Fangda Carbon, other enterprises' production capacity is less than 100000 tons, and the distribution of production capacity is relatively scattered. The market shares of Liaoning Dandan, Hunan Mingda, Jilin Carbon, Zhongzhou Carbon and Shanxi Hongte are 6%, 5%, 4%, 4% and 4% respectively.

2. Capacity distribution

China's graphite electrode related enterprises are mainly distributed in Northeast and North China. In 2021, the production capacity of graphite electrode in North China and Northeast China accounted for more than 60%. North China accounts for 35%, and Northeast China accounts for 27%. Central and Eastern China accounted for 17% and 9% respectively.

Ⅱ. China's graphite electrode industry development trend

1. Increasing industrial concentration

At present, under the guidance of China's "Double Carbon" policy, the graphite electrode industry's requirements for environmental protection and energy consumption are constantly increasing. However, achieving this goal requires more non-technical support, which makes the minor enterprises face greater pressure. The overall capacity utilization rate is at a low level. In this context, many medium and low-end graphite electrode enterprises need to face the shrinking demand on the one hand, and the improvement of environmental protection and energy consumption requirements on the other hand, competitiveness will continue to weaken, thus gradually eliminated. It can be expected that in the future, with the withdrawal of a large number of low-end enterprises and the promotion of industry integration, the industry concentration will continue to increase.

2. Ultra-high power graphite electrode products become the mainstream trend
Graphite electrode is an essential consumable for EAF steelmaking. In recent years, the short process steel making, also known as electric furnace steel making, will become an important trend in the future. High quality steel and special steel are also produced by electric furnace smelting. Increasing the proportion of EAF steel is an important measure for China to transform from a big steel country to a powerful steel country. In addition, the ultra-high power graphite electrode has relatively high efficiency, low pollution, low cost and other characteristics, which is more in line with the environmental protection requirements of energy conservation and consumption reduction in China. It will be more popular in the market, and the demand will continue to grow, promoting the development of China's graphite electrode industry.

3. The industrial and export development environment is improving

China's industrial development has promoted the steady development of downstream applications of graphite electrodes, such as the EAF steelmaking market, industrial silicon market and yellow phosphorus market. Therefore, stable industrial development is one of the driving forces of China's graphite electrode market. On the other hand, with the continuous improvement of the technical level and product competitiveness of China's graphite electrode industry, China's graphite electrode will be more and more recognized and trusted by overseas customers, and the export volume of graphite electrode is expected to rise further, becoming a key factor to drive the digestion of China's graphite electrode production.  Graphite electrode industry news can be further learnt from us.