According to market sources, the Chinese Graphite electrode prices have declined to a varying degree this week. The UHP grade electrode with diameter under 500mm has registered the largest drop in price amid abundance of market supply.
UHP electrodes with diameter over 550mm saw slower fall given a relatively stable supply in the market. The prevailing prices of UHP electrode 450mm are RMB 70,000-75,000/MT (USD 10,775 – 11,555/MT), down by RMB 10,000-15,000/MT (USD 1,540 – 2,300/MT) against last week. UHP electrode 600mm are RMB 110,000-135,000/MT (USD 16,930 – 20,780/MT) and UHP electrode 700mm are RMB 140,000-160,000/MT (USD 21,550 – 24,630/MT).
China has carried out environmental protection inspection at the end of May and has sent six inspection groups to 10 major steelmaking provinces (including Hebei, Henan, Inner Mongolia, Ningxia, Heilongjiang, Jiangsu, Jiangxi, Guangdong, Guangxi and Yunnan) across China to supervise the remedial treatments for environmental protection in order to rein in the country’s rising crude steel production and keep in check the pollution levels.
Following the output cuts in Hebei, Jiangsu and Shandong provinces, some of the small electric arc furnace producers and induction furnace mills in Guangdong and Guangxi provinces had shut down their production due to the inspection starting from 5 Jun – 5 Jul. It was found that the utilization rates in some mills were substantially higher than their capacity filed with the MIIT (Ministry of Industry and Information Technology).
However, as per the market sources, the impact of these inspections on graphite electrode manufacturers was limited. It was seen that only few graphite electrode manufacturers in Henan and Hebei reported production loss by the move while factory activities in larger part of regions remained normal.
The industry reports suggest that the surge in China’s electric furnace steel has exceeded expectations this year, with the output estimated to reach 0.95 MnT to 1 MnT. Meanwhile, over 20 new electric furnaces will soon be set up in the second half of this year, which will largely be in central and southern China leading to increased GE demand in the coming months.
On the supply side, the country is currently having sufficient supplies of graphite electrode. Pingdingshan Sanji Carbon Co, a company that mainly produces HP electrode, is estimated to supply its UHP grade electrodes in mid-June whereas Ulanqab Fuxing Carbon’s new batch of UHP electrode 700mm products is expected to come out in late June or early July. Thus the price of graphite electrode in the country is expected to remain largely stable with minor fluctuations in the second half of 2018 until there is a new announcement of further steel production cuts or policy change by the Chinese government.
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