【Graphite Electrode】Competition Pattern and Development Trend

In recent years, China has introduced a series of policies to reduce excess steel capacity, such as the Opinions on Reducing Excess Capacity in the Steel Industry and Achieving Development through Poverty Alleviation. The implementation of these policies to replace outdated crude steel capacity (e.g., using blast furnaces of 400 cubic meters or less for steel production) with electric arc furnace steelmaking has greatly stimulated the demand for graphite electrodes in China's steel industry. 

Ⅰ. China's Graphite Electrode Industry Competition Pattern Analysis

1. Market Share

Currently, the concentration of China's graphite electrode industry is relatively low, with about 30% of the industry's CR5 and about 48% of the industry's CR10 in 2021, of which, Fangda Carbon is the industry leader, accounting for only about 13%. Its main products include graphite electrodes, carbon bricks for blast furnaces, graphite cathode carbon blocks for electrolytic aluminum, special graphite products, carbon/graphite materials for nuclear power, graphene, and other carbon products.

Except for Fangda Carbon, other enterprises have a production capacity of no more than 100000 tons, with a relatively scattered distribution of production capacity. Liaoning Dandan, Hunan Mingda, Jilin Carbon, Zhongzhou Carbon, and Shanxi Hongte have market shares of 6%, 5%, 4%, 4%, and 4%, respectively.

2. Capacity Distribution

China's graphite electrode related enterprises are mainly located in Northeast and North China. In 2021, the proportion of graphite electrode production capacity in North China and Northeast China has exceeded 60%. North China accounts for 35%, while Northeast China accounts for 27%. The proportions in the Central and Eastern regions are around 17% and 9%, respectively.

Ⅱ. China's Graphite Electrode Industry Development Trend

1. Increasing Industrial Concentration

Currently, under the guidance of China's "dual carbon" policy, the industry's requirements for environmental protection and energy consumption continue to increase. However, to achieve this, more technical support is required, making small and medium-sized enterprises face greater pressure and overall capacity utilization rate at a low level. In this context, many medium and low end graphite electrode enterprises need to face shrinking demand on the one hand, as well as improving environmental protection and energy consumption requirements. Their competitiveness will continue to weaken, and they will gradually be eliminated. It can be expected that in the future, with the withdrawal of a large number of mid to low end enterprises and the advancement of industry integration, the concentration of the graphite electrode industry will also continue to increase.

2. Ultra high power graphite electrode products become the mainstream trend in the industry

Graphite electrode is a necessary consumable for electric arc steelmaking. With the strong support of the state for electric arc furnace short process steelmaking in recent years, short process steelmaking, that is, electric arc steelmaking, will become an important trend in the future. High quality steel and special steel are also produced through electric furnace smelting. To transform China from a major steel country into a powerful steel country, increasing the proportion of electric furnace steel is an important measure. In addition, ultra-high power graphite electrodes have relatively high efficiency, low pollution, low cost, and other characteristics, which are more in line with China's environmental requirements for energy conservation and consumption reduction. They will be more favored by 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 graphite electrode downstream applications, such as the electric arc furnace steelmaking market, industrial silicon market, and yellow phosphorus market, etc. 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 technological level and product competitiveness of China's graphite electrode industry, China's graphite electrodes will increasingly be recognized and trusted by overseas customers, and the export volume is expected to further increase, becoming a key factor to promote the consumption of China's graphite electrode. Contact us to learn more reports on Graphite electrode market.