【Needle Coke】Weak Supply and Demand in the First Half, Will the Market Turnaround in the Second Half?

The average price of coal-based raw needle coke was 7,153 yuan/ton, a year-on-year decrease of 14.6%. The average price of petroleum-based raw needle coke was 7,171 yuan/ton, a year-on-year decrease of 20.9%. The average price of coal-based calcined needle coke was 10,036 yuan/ton, a year-on-year decrease of 9.9%. The average price of petroleum-based calcined needle coke was 10,896 yuan/ton, a year-on-year decrease of 15.5%. Learn more about relevant calcined coke products.

Source: Oilchem 

The main reason for the weakness in the needle coke market in the first half of the year was the weak end demand. At the end of 2022, battery manufacturers, including negative electrode materials manufacturers, were overly optimistic about demand expectations due to the expiration of new energy vehicle subsidies, resulting in a large backlog of semi-finished and finished goods inventory. In the first half of this year, the new energy supply chain reduced the demand for needle coke to reduce inventory on one hand, and on the other hand, it sought cost reduction by using more low-cost resources such as petroleum coke as substitutes. As a result, the overall demand for needle coke declined significantly. Another downstream sector of needle coke, graphite electrode, also performed poorly. Electric arc furnace steel mills have been operating at a loss since April, and with the steel industry's demand not fully recovered, graphite electrode production remained sluggish, leading to cautious procurement of raw materials. Therefore, in the first half of the year, the needle coke market experienced pressure of oversupply, and market prices remained suppressed.

Source: Oilchem 

In the second half of the year, the price trend of calcined needle coke may show a decline followed by a rise, while the price of raw needle coke is expected to fluctuate within a narrow range. The average price of raw needle coke is projected to be 5,358 yuan/ton, and the average price of calcined needle coke is projected to be 8,267 yuan/ton. The negative electrode market will continue to steadily recover, with the peak season for new energy vehicles expected around October. The increase in raw material procurement demand will provide some boost to the needle coke market. However, cost reduction is the main theme in the negative electrode materials industry, which will constrain the price of raw needle coke and limit significant upward potential. Graphite electrode demand is typically weaker in the summer season, and its performance will depend on the recovery of the global steel industry. It is expected to see some improvement in graphite electrodes around October or November as steel mill demand and profitability recover, which may positively impact the calcined needle coke market. Contact us for detailed information on needle coke products market.