【Graphite Electrode】2023 Market Price Review

     In 2023, the trend of China's graphite electrode market showed a downward trajectory, with high-power and regular-power graphite electrodes experiencing a continuous decline throughout the year, while ultra-high-power graphite electrodes occasionally exhibited a reversal and rebound. January marked the peak of graphite electrode prices, reaching the highest point of the year, followed by a decline entering the lowest point in December.

     In the first quarter, influenced by environmental protection measures, graphite electrode manufacturers in regions such as Hebei, Shanxi, and Henan received notices of production restrictions. Most calcination and processing lines were shut down. However, due to stockpiling before the Chinese New Year, graphite electrode production and output reached an annual high, and the market witnessed significant stockpiling, consuming a considerable amount. After the holiday, downstream demand normalized, leading to a subsequent drop in graphite electrode prices.

    In the second quarter, as downstream demand stabilized and with sufficient production in the first quarter, resulting in a state of oversupply, some graphite electrode manufacturers reduced production. Overall production levels decreased, impacting smaller manufacturers more significantly. The majority of manufacturers focused on supplying a limited number of fixed customers, leading to a gradual decline in prices.

    In the third quarter, influenced by environmental policies, downstream demand decreased further, with reduced blast furnace and electric furnace operations. Consumption of graphite electrodes fell more than expected, and most manufacturers primarily consumed low-priced inventory from the previous period. Simultaneously, influenced by the prices of graphite electrode raw materials, the decline in graphite electrode prices intensified.

    In the fourth quarter, after more than half a year of continuous losses for downstream industries, the decrease in demand for graphite electrodes became more apparent. The continuous decline in graphite electrode raw material prices contributed to a reduction in the cost of graphite electrodes. As the year-end approached, graphite electrode enterprises entered into intense competition, engaging in price wars to quickly lower prices, surpassing cost lines, and engaging in profitless transactions. This situation led to a mixed market with varying qualities of graphite electrodes.

    Overall, the Chinese graphite electrode market in 2023 leaned towards weakness. On one hand, the decrease in raw material prices drove down graphite electrode costs, with a substantial year-on-year decline. On the other hand, the significant decrease in blast furnace and electric furnace steel mill operations and profits effectively restrained the upward movement of graphite electrode prices. The combination of declining costs and demand resulted in a slide in graphite electrode supply, defining the overall downward trend in graphite electrode prices throughout 2023. Continue to follow our updates for more analysis on the graphite electrode market.