【Graphite Electrode】Environmental Issues Lead to Production Reduction, Tightening Low-Price Spot Market

In the recent period, environmental rectification in the Hebei region has resulted in some graphite electrode companies reducing or halting production. The circulation volume of spot goods has decreased, and in the East and Southwest regions, some electric arc furnace (EAF) steel mills have resumed production, primarily relying on on-demand procurement. 

As of November 8th, the mainstream quotations for UHP400mm specifications in the market range from 17,500 to 18,500 RMB/ton. The mainstream quotations for UHP450mm specifications with 30% needle coke content are in the range of 17,500 to 18,000 RMB/ton. For UHP600mm specifications, the mainstream quotations range from 20,000 to 21,000 RMB/ton, and for UHP700mm, the quotations are in the range of 24,000 to 25,000 RMB/ton.

Regarding raw materials, the upstream needle coke prices have stabilized, while low-sulfur petroleum coke has shown a weak trend this week with a slight price decrease. Cost pressures have eased slightly compared to the previous period but remain at relatively high levels. On the supply side, the domestic graphite electrode market has started at a low level, primarily due to environmental control in the Hebei region, leading to the reduction or halt of production by some enterprises, mainly focusing on depleting previous inventories. It is expected that graphite electrode production in November will decrease compared to the previous month, leading to a tightening of low-price spot goods in the market.

Regarding demand aspect, the recent recovery in profits for EAF steel mills has boosted confidence among downstream steel mills influenced by positive policies in the terminal market. In the East and Southwest regions, some EAF steel mills have resumed production, contributing to a small increase in national EAF steel production for four consecutive weeks. However, EAF steel mills remain cautious, adopting a wait-and-see attitude towards graphite electrodes, purchasing on demand, and showing a limited willingness to stock up.

Future Forecast: In the near term, the macro policies in the terminal market continue to exert influence on the graphite electrode market. However, the impact of these policies on the graphite electrode market will take time. The future driving force will depend on the recovery of terminal demand. It is expected that the graphite electrode market will mainly operate steadily in the short term. Follow us for the latest updates on the graphite electrode market.