【Graphite Electrode】2024 Market Outlook

      Raw Material Costs: China's production of needle coke continues to grow, reaching 1.1 million tons in 2023, a year-on-year increase of 18.28%. Regarding petroleum coke, with the restoration of normal shipping speeds in 2023, the quantity of imported petroleum coke increased. The demand for domestic petroleum coke in the second half of 2023 may increase compared to the first half, but the actual demand may not meet expectations. Overall, the outlook for petroleum coke is not optimistic. Therefore, the trends of the two major raw materials with the most significant impact on graphite electrode consumption in 2024 are not clear, with costs being a primary influencing factor.

     Market Supply: In the first two months, mainstream graphite electrode companies mostly maintained normal production, while small and medium-sized enterprises essentially ceased production. The market operating rate was lowered and remained low. After March, the overall graphite electrode market fell short of expectations in terms of operating rates. Foreign market demand remained low, with a weak willingness to stockpile after the new year. Graphite electrode companies accumulated high inventories. Although some companies reduced prices to accelerate fund inflow, the recovery in downstream demand was not apparent, accelerating malicious competition in the market.

Market Demand: The demand for graphite electrodes in the Chinese market mainly reflects in the steel market and export market. In January and February, the steel market started at a low level. Mainstream steel mills had stockpiled graphite electrodes, and the operating rates of electric arc furnace steel mills were not ideal. Overall, the purchasing intention of steel mills was weak, and the impact on the graphite electrode market was limited.

Industry Policies: With the gradual release of domestic electric arc steelmaking capacity, the demand for graphite electrodes is expected to grow. As the number of large-capacity ultra-high-power electric arc furnaces with high labor efficiency and low comprehensive costs increases, the maximum allowable current for graphite electrodes used in electric arc furnaces is also higher. The maximum allowable current for graphite electrodes used in electric arc furnaces is positively correlated with the diameter of the graphite electrodes. Therefore, to meet the working conditions of large-capacity ultra-high-power electric arc furnaces, it is imperative to develop large-diameter graphite electrodes. The relaxation of foreign trade protectionist policies may promote the export of graphite electrodes from China, mainly to Asia, Europe, Africa, and other regions. The global economic recovery will stimulate the export of graphite electrodes from China.

Market Sentiment: Based on the current development of the domestic steel market, the production sentiment of graphite electrode manufacturers is relatively pessimistic. Some industry insiders predict that the demand for graphite electrodes in the market will be maintained. Steel mills' stocking activities are not as frequent as in previous years, and steel mills may maintain a normal purchasing frequency. Around April, the demand for graphite electrodes may rebound, and in the second quarter, graphite electrodes may reach a high point. The market will be in a state of high supply and high demand. Due to the short-term mismatch between supply and demand, the price war will become more intense. In the third and fourth quarters, the domestic graphite electrode market may experience a high-level decline. The trend of the Chinese graphite electrode market in 2024 may be similar to that of 2023. For further information on graphite electrode products, feel free to contact us at any time.