The company specialised in carbon and graphite electrode (GE) production Energoprom Group signed a 5-year contract with country’s largest steel pipes manufacturer, PAO TMK for the supply of graphite electrodes to TMK’s electric arc furnaces.
In accordance with the contract, for the period from 2018 through 2022 ENERGOPROM will meet upto 40% of TMK’s total requirement for graphite input materials and provides for formula-based pricing. The products will be shipped from the Energoprom’s Novocherkassk electrode plant.
According to company sources, the pricing formula has been linked to the weighted average import prices of Russia’s large western producers (Graftech, Showa Denko, Nippon Carbon, SEC Carbon etc).
“ENERGOPROM aims to build long-term and mutually advantageous relations with the consumers of our products. The long-term contract with TMK represents in many aspects a new mechanism for the benefit of both parties. The confidence in supplies and quality of our graphite electrodes for TMK and other clients, among which large Russian companies prevail, as well as the possibility to plan and implement measures to increase the volumes and to improve the quality of our products are the main advantages of this mechanism,”Viktor Nechuyatov, CEO of ENERGOPROM, said.
About TMK and Energorprom Group
Russia’s PAO TMK is one of the world’s top three pipe manufacturers producing more than 6 MnT of tubular goods per year. Its plants are located in Russia, U.S, Romania, and Kazakhstan.
Enogoprom Group has two plants that are engaged in graphite electrode production. One at Novocherkassk (Rostov region, South of Russia) that have GE capacity of 45,000 TPY and another at Novosibirsk (in western Siberia) with a capacity of 5,000 TPY.
Graphite electrode price scenario
According to market sources, the GE prices in Russia is varying significantly amid its increased demand globally. For UHP (Ultra high power) grade GE, export prices from large western producers long-term contract prices range from USD 7,000 to 12,000/MT. The graphite electrode producers in countries like Russia, U.S. and Europe increased their product prices quite modestly as the companies there enter only into long-term supply contracts. On the other hand, Chinese suppliers GE prices range from USD 20,000 to 25,000/MT in the spot market.
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