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Supply and demand game, graphite electrode companies continue to rise

    Today, the price of graphite electrodes in China is raised by 1,000 yuan/ton. As of December 2, 2022, the mainstream price of graphite electrodes in China with a diameter of 300-600mm: ordinary power 21,500-23,500 yuan/ton; high power 21,500-24,500 yuan/ton; ultra-high power 23000-27500 yuan/ton; ultra-high power 700mm graphite electrode 30000-31000 yuan/ton.

    The main reason is that due to the pressure on the cost side and the lack of profits, graphite electrode companies are in a strong mood, and the supply side of the current graphite electrode market is shrinking. Some companies still control production and reduce production.  Therefore, under the dual support of supply and cost, graphite electrode companies pushed up prices. However, due to the poor performance of downstream steel mills, there is currently no transaction in the graphite electrode market after the implementation of the new price.  The specific analysis is as follows:

    1. Insufficient profits, graphite electrode companies look forward to rising sentiment obviously

    At present, the price of low-sulfur petroleum coke in Fushun and Daqing, the upstream raw materials of graphite electrodes, is 6,320 yuan/ton, down 9.42% from last week.  However, due to the long production cycle of graphite electrodes, the price drop has not had a significant impact on the graphite electrode market.  The average market price of coal tar pitch is about 7,923 yuan/ton, and the average market price of needle coke is about 11,708 yuan/ton. It can be seen that the price of graphite electrode raw materials is still at a high level.  In theory, the current production cost of graphite electrode market is about 21,000-22,000 yuan/ton. Compared with the actual transaction price of the current graphite electrode market, the overall profit margin of the graphite electrode market is insufficient, and graphite electrode companies still hope to reverse the loss-making situation.

2.The graphite electrode market is underutilized, and the quotations of enterprises are firm

 

    In terms of steel mills: In the case of loss-making electric furnace steel mills, the operation is insufficient, and the demand for graphite electrodes is relatively small.  Long-process steel mills mostly purchase on demand.  The increase in the price of graphite electrodes may stimulate the sentiment of steel mills to stock up.

    In terms of export: According to the staff of graphite electrode companies, export orders have decreased significantly compared with last year, and there is a bearish sentiment on the market outlook.

    FUTURE FORECAST

    At present, graphite electrode companies are underutilized, and the cost side is still at a high level. However, the demand in the downstream market is weak, and procurement is mainly on-demand. This time, graphite electrode companies are pushing up prices strongly, hoping to reverse the loss situation, but the downstream demand has not yet seen significant improvement.  , and the new price has just started to be implemented, and there has been no transaction after the graphite electrode price has been pushed up.  Therefore, on the whole, the follow-up graphite electrode prices will be based on the gradual implementation of this increase.


Post time: Dec-03-2022