【Graphite Electrode】Market Analysis in China - September 2023

Table 1: China Domestic Graphite Electrode Market Transaction Prices

Electrode Market: In this week, domestic prices for ultra-high-power graphite electrodes have increased. Prices for ultra-high-power 450mm graphite electrodes rose by 1000 CNY to 17,000 CNY/ton, while prices for ultra-high-power 600mm graphite electrodes increased by 1500 CNY to 19,500 CNY/ton. The graphite electrode market is witnessing positive demand, coupled with factors such as tight supply and high costs, leading to optimistic price expectations. 

Raw Materials: The average operating rate of 87 independent arc furnace steel mills across the country is 75.57%, increasing by 0.73 percentage points compared to the previous period and up by 14.40 percentage points year-on-year. Slight increases were observed in the Northeast and Central China regions, while other regions remained stable. The average capacity utilization rate of these mills is 53.30%, decreasing by 0.30 percentage points compared to the previous period but increasing by 1.46 percentage points year-on-year. There were slight decreases in the South China and Central China regions, while minor increases were observed in the Northeast, North China, East China, Northwest, and Southwest regions.

Looking at the data for this week, there is a divergence in the national independent arc furnace operating rate, with a slight increase in operation and a minor decrease in capacity utilization. The increase in the operating rate can be attributed to factors such as the gradual recovery and increased efficiency of a steel mill in the Liaoning region of Northeast China, which resumed production on September 5th. In addition, a furnace factory in the Hubei region of Central China resumed production on September 12th, with a daily output of around 8,000 tons, maintaining unsaturated production. Regarding the profitability of steel mills, there has been a decrease in the number of profitable mills, an increase in the number of mills with stable profitability, and a decline in profit levels. Some steel mills in the South China and Central China regions reported a decrease in profitability, resulting in minor losses. As a result, they chose to reduce production and only a few steel mills in East China reported relatively abundant scrap steel supplies, leading to minor production increases. Consequently, the capacity utilization rate remained slightly lower. According to feedback, some regions have already begun implementing electricity discounts, which have motivated steel mills to consider minor production increases while maintaining electricity consumption at or below a certain level.

Looking ahead to next week, one 70-ton electric furnace in the Central China region is expected to undergo maintenance starting on September 14th, with the resumption of production to be determined. In summary, it is expected that the operating rate of independent arc furnace factories may increase slightly, and capacity utilization rates may rise slightly next week. For more graphite electrode industry updates, please don't hesitate to reach out to us.