【Graphite Electrode】Industry Competitive Landscape 

and Development Trends in China!

In recent years, the Chinese government has enacted a series of policies to reduce excess steel capacity, such as the 'Opinions on Resolving Overcapacity and Achieving Resilient Development in the Steel Industry.'

The implementation of these policies has led to the replacement of outdated crude steel capacity (e.g., steel production using blast furnaces of 400m³ and below) by electric arc furnace steelmaking, significantly increasing the demand for graphite electrodes in the Chinese steel industry. 

Analysis of the Competitive Landscape in China's Graphite Electrode Industry

Market Share:

Currently, China's graphite electrode industry has relatively low concentration, with a CR5 (the combined market share of the top 5 companies) of about 30% and a CR10 (the combined market share of the top 10 companies) of about 48% in 2021. Among them, Fangda Carbon, as an industry leader, accounts for only about 13%. Its main products include graphite electrodes, carbon bricks for blast furnaces, graphite cathode blocks for aluminum electrolysis, special graphite products, nuclear-grade carbon/graphite materials, and graphene, among other carbon-related products.

Apart from Fangda Carbon, the production capacity of other companies does not exceed 100,000 tons, and their production capacities are relatively dispersed. The market shares of companies like Liaoning Danchan, Hunan Mingda, Jilin Carbon, Zhongzhou Carbon, and Shanxi Hongte are about 6%, 5%, 4%, 4%, and 4%, respectively.

Distribution of Production Capacity:

Most of China's graphite electrode-related companies are located in the northeastern and northern regions. In 2021, the North China and Northeast China regions accounted for over 60% of the graphite electrode production capacity in China. The North China region accounted for 35%, while the Northeast China region accounted for 27%.The Central China and East China regions accounted for approximately 17% and 9%, respectively.

Development Trends in China's Graphite Electrode Industry

Increasing Industry Concentration:
Currently, guided by China's 'Dual Carbon' policy, the industry's environmental and energy consumption requirements are continuously rising. However, achieving these goals requires more technological support, which places significant pressure on small and medium-sized enterprises. As a result, many lower-end graphite electrode companies will face shrinking demand and heightened environmental and energy consumption requirements, leading to a continuous erosion of their competitiveness and gradual elimination. It can be expected that with the exit of numerous lower-end enterprises and the promotion of industry consolidation, the concentration of the graphite electrode industry will continue to increase.
Ultra-High Power Graphite Electrodes Becoming the Mainstream Trend:
Graphite electrodes are essential consumables for electric arc steelmaking. With the strong support from the government for short-process steelmaking using electric arc furnaces, short-process steelmaking, also known as electric furnace steelmaking, will become an important trend in the future. High-quality steel and specialty steel are also produced through electric furnace steelmaking. China's transformation from a major steel producer to a strong steel producer involves increasing the share of electric furnace steel, making ultra-high power graphite electrodes more efficient, with lower pollution and costs. They are more in line with China's requirements for energy-saving and emission reduction, and thus, they are expected to gain more market favor, leading to a continuous increase in demand and further driving the development of China's graphite electrode industry.
Favorable Industrial and Export Development Environment:
The development of China's industry has promoted the steady development of downstream applications for graphite electrodes, such as the electric arc steelmaking market, industrial silicon market, and yellow phosphorus market. Therefore, stable industrial development is one of the driving forces for the Chinese graphite electrode market. On the other hand, as China's graphite electrode industry's technological level and product competitiveness continue to improve, Chinese graphite electrodes will gain increasing recognition and trust from overseas customers. The export volume of graphite electrodes is expected to further increase, becoming a key factor in driving the consumption of graphite electrodes in China. Contact us to learn more about the graphite electrode industry.