South Korea’s Graphite Electrode Import Cost Surges Burdening Steel Producers

Source: KOSA

South Korea which is majorly dependent upon imports to meet its graphite electrode (GE) requirement is struggling with rising GE prices globally subsequently raising the cost for steel-makers manufacturing steel using electric arc furnaces (EAFs).

The growing awareness towards the environment due to polluting blast furnaces used for steel production has resulted in increased usage of electric furnaces (EAFs) across the globe. With this, the demand for graphite electrode (GE) a key raw material for EAFs ha also surged significantly since the latter half of 2017.

In addition to this, closure of various polluting GE units in China coupled with a shortage of needle coke (raw material for graphite electrode) has also supported the rise in GE prices.

According to KOSA (Korea Iron & Steel Association), the average imported price of GE in South Korea in the month of Mar’18 increased to USD 8,527/MT from USD 5,807/MT in Feb’18 and up by USD 3,731/MT against GE prices in the month of Jan’18.

Both China and Japan which are the main exporters of graphite electrodes has recorded a significant increase in past few months. Import prices of Chinese-made electrodes in March were USD 14,119/MT, up by USD 2,211/MT M-o-M basis and that of Japan rose by USD 1,410/MT to USD 8,071/MT.

According to a local steelmaker in South Korea, the local rebar prices in South Korea increased by WON 30,000/MT (USD 28/MT) in Mar’18, M-o-M basis due to a surge in electrode prices.

South Korea’s GE imports in first four months of 2018 (Jan-Apr) stood at 13,775 tonnes up by 6% y-o-y basis, out of which 7,411 tonnes came from Japan 3,774 tonnes from China.

South Korea’s Country-wise GE Imports from Jan – Apr’18

Source: KOSA