【Graphite Electrode】Analysis of Market Influencing Factors

Data Source: Oilchem

In October, the overall trend of the graphite electrode market stabilized with a slight upward movement. Due to the pressure on production and operating costs, some graphite electrode manufacturers made minor adjustments to market quotations. As of October 27th, the average monthly price for UHP 600mm was 21,500 RMB/ton, for HP 500mm was 16,500 RMB/ton, and for RP 500mm was 15,500 RMB/ton. Given the slim to nonexistent profits in graphite electrode production, only a few mainstream companies are maintaining low-load production to meet downstream customer demand. According to research, most enterprises indicate that the current supply-demand situation will not experience significant fluctuations, and the market's recovery will take some time.

Data Source: Oilchem

This week, the average operating rate of independent arc furnace steel mills was 71.53%, showing a 0.93 percentage point increase compared to the previous week and an 11.07 percentage point increase year-on-year. This increase is attributed to recent macroeconomic stimulus measures, leading to a noticeable rise in finished product prices and a certain improvement in the profitability of steel mills. Consequently, some steel mills have chosen to increase operating hours to enhance production efficiency, providing a certain boost to the graphite electrode market. However, this increase is partial and temporary, and future recovery will depend on monitoring steel mill demand.

Data Source: Oilchem, General Administration of Customs

In September 2023, the total national graphite export volume was 24,800 tons, a slight increase from the previous period. It is expected that the export volume of graphite electrodes in October will remain stable and may see a modest increase. The recent removal of export restrictions on graphite electrodes is a positive development, leading to expectations of more companies joining the export market. On the flip side, increased competition in the graphite electrode market is anticipated. In the long term, with continuous improvement in Chinese graphite electrode technology and product quality, the export volume of graphite electrodes is expected to further increase.

In summary, in the short term, the graphite electrode market is likely to face challenges of low production profits and low operating rates. Looking ahead, favorable macroeconomic factors for the steel market and the trend of electric arc furnace steelmaking becoming increasingly important suggest a potential continuous growth in the demand for graphite electrodes. Feel free to contact us anytime to learn the latest news on the graphite electrode market.