The global demand for Graphite electrodes (GE) which has become the new gold for the steel sector has gained momentum since the latter half of 2017. This happened with the surge in less polluting EAFs (Electric arc furnaces) usage for steel production amid increased awareness towards the environment and closure of many not so environmentally friendly GE producing units as a part of its structural supply-side reforms.
However, despite the closure of about 30% of GE capacities in China, the country still remains the leader in GE production and its exports. According to the country’s customs data, China exported about 201,695 tonnes of GE in 2017 with major exports being made to Iran (22,206 tonnes) followed by Russia (23,111 tonnes), Turkey (15,603 tonnes) and then U.S. (15,827 tonnes).
In first two months of the current year 2018, Jan and Feb, the country exported about 38,493 tonnes of GE, an increase of 81% against the corresponding period of the previous year 2017.
According to the market reports, China has granted approvals for the installation of new steelmaking facilities with a capacity of 149.8 MnT a year between the start of 2017 and April 2018 against the closure of 169.7 MnT – as part of its capacity replacement campaign. Of the total new capacity, about 34% (51.4 MnT) will use electric arc furnaces, while the rest will be converters. These new capacities are expected to commission during the time period of 2018-2020 and the closure of old facilities will take place once the new ones are commissioned.
With this scenario of upcoming EAFs facilities in China, the domestic demand for GE is likely to increase in the upcoming years indirectly hit the country’s graphite electrodes exports. However, reports suggest that many Chinese companies are adding to their GE capacities and country’s GE output is expected to increase to reach 720,000 tonnes in 2020 against 551,000 tonnes in 2017. Thus the chances of China’s GE exports taking a slight hit will be only during 2018 until the latter half of 2019.
Other countries GE exports
The country next to China in exporting GE is EU (European Union) that exported 115,960 tonnes of GE in 2017 with highest exports being made to 16,398 tonnes followed by Russia (15,394 tonnes) and the U.S. (10,0977 tonnes). In Jan-Feb’18, EU exported 18,251 tonnes of GE against 17,959 tonnes in Jan-Feb’17.
Japan exported about 98,670 tonnes of GE in 2017 with highest exports to South Korea (25,382) followed by U.S. (13,796 tonnes). In Jan-Feb’18, the country exported 16,156 tonnes of GE, a surge of 26% against the corresponding period of previous year.
A significant share of the onus to serve the global Graphite Electrode export markets seems to have fallen on India; after China has cut down its GE production. In 2017, India’s GE exports stood at 80,447 tonnes with highest exports being made to Turkey and U.S. In Jan’18, India exported 6,498 tonnes of GE against 12,482 tonnes in Jan’17.
In 2017, Russia exported 39,458 tonnes of GE with U.S. having the highest share in country’s total exports (33%, 13,206 tonnes) followed by Kazakhstan (7,405 tonnes) and Belarus (3,388 tonnes).
U.S. exported about 19,003 tonnes of GE in 2017 with Mexico and Canada having the highest share, 4,428 tonnes and 3,888 tonnes respectively. During Jan-Feb’18, the country exported 2,113 tonnes of GE against 3,577 tonnes in the corresponding period of the previous year 2017.
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