【Graphite Electrode】In-Depth! Industry Competitive Landscape and Development Trends

In recent years, the Chinese government has introduced a series of policies to reduce excess steel capacity, such as the "Opinions on Resolving Excess Capacity in the Steel Industry and Achieving Recovery and Development." The implementation of these policies has led to the replacement of outdated steelmaking capacity (such as blast furnaces with a capacity of 400 cubic meters or less) by electric arc furnaces, significantly boosting the demand for graphite electrodes in China. 

I. Analysis of the Competitive Landscape in the Chinese Graphite Electrode Industry

1. Market Share

Currently, the concentration of China's graphite electrode industry is relatively low, with a CR5 (concentration ratio of the top 5 companies) of about 30% and a CR10 (concentration ratio of the top 10 companies) of about 48% in 2021. Among them, Fangda Carbon, as an industry leader, holds a market share of only about 13%. Its main products include graphite electrodes, refractory bricks for blast furnaces, graphite cathode blocks for aluminum electrolysis, special graphite products, carbon/graphite materials for nuclear power, graphene, and other carbon-based products. Apart from Fangda Carbon, the capacities of other companies do not exceed 100,000 tons and are relatively dispersed. In 2021, the market shares of companies like Liaoning DanTan, Hunan Mingda, Jilin Carbon, Zhongzhou Carbon, and Shanxi Hongte were around 6%, 5%, 4%, 4%, and 4%, respectively.

2. Capacity Distribution

Major graphite electrode-related companies in China are mainly located in the Northeast and North China regions. In 2021, the North China and Northeast regions accounted for over 60% of graphite electrode production capacity in China, with North China holding a share of about 35% and the Northeast about 27%. The Central and East China regions accounted for approximately 17% and 9%, respectively.

II. Development Trends in the Chinese Graphite Electrode Industry

1. Increasing Industry Concentration

Currently, guided by China's "Dual Carbon" policy, the industry's environmental and energy consumption requirements are continuously increasing. However, achieving these standards requires more technological support, putting significant pressure on small and medium-sized enterprises. The overall capacity utilization rate remains low. In this context, many mid- to low-end graphite electrode companies face declining demand on one hand and increasing environmental and energy consumption requirements on the other. As a result, their competitiveness will continue to weaken, and they are gradually being phased out. It can be expected that in the future, with the exit of a large number of mid- to low-end enterprises and the promotion of industry consolidation, the concentration of the graphite electrode industry will continue to increase.

2. Ultra-High Power Graphite Electrodes as the Industry Mainstream Trend

Graphite electrodes are consumables essential for electric arc steelmaking. With strong support from the national government in recent years for short process steelmaking with electric arc furnaces, short process steelmaking, such as electric furnace steelmaking, is becoming an important trend. High-quality steel and special steel are also produced through electric furnace smelting. To transform China from a steel-producing nation to a steel-producing powerhouse, increasing the proportion of electric furnace steel is crucial. Moreover, ultra-high power graphite electrodes are relatively efficient, environmentally friendly with lower costs. They align well with China's requirements for energy efficiency and emissions reduction and are expected to gain greater market preference, driving the development of the Chinese graphite electrode industry.

3. Positive Industrial and Export Development Environment

China's industrial development has been promoting the steady growth of downstream applications for graphite electrodes, including the electric arc furnace steelmaking market, the industrial silicon market, and the yellow phosphorus market. Thus, stable industrial development is one of the driving forces for the Chinese graphite electrode market. On the other hand, with the continuous improvement of China's graphite electrode industry's technological capabilities and product competitiveness, Chinese graphite electrodes will gain increasing recognition and trust from overseas customers. The export volume of graphite electrodes is expected to rise further, becoming a crucial factor in absorbing China's graphite electrode production. For more information on graphite electrode market policies, feel free to contact us at any time.