SteelMint has heard from its market sources, the steel mills in China have started making inquiries for the purchase of graphite electrodes for the upcoming month of December. However, at present most of the electrode manufacturers in China have low electrode inventories and there is no change in their quotation.
As of this week, the prevailing prices for 450-500mm UHP grade electrodes are assessed at RMB 76,000 – 83,000/MT (USD 11,000 – 11,945/MT), 600mm UHP electrode at RMB 105,000-130,000/MT (USD 15,000– 18,700/MT) and 700mm UHP electrodes at RMB 120,000-150,000/MT (USD 17,270 – 21,560/MT).
With the recent drop in Chinese domestic steel prices amid the start of winter heating season, the profit margin of some of the steel manufacturers has been squeezed and so has their GE demand. Now towards the end of the year amid weak market demand for steel, the reduction in the purchase of graphite electrodes is inevitable.
Although in the short term, market experts believe that GE prices will still be supported by higher raw material (needle coke) costs and continue to remain stable, it will ultimately depend on downstream steel demand in the country which has high chances to have negative trend during winter heating season. With poor demand from end-user segment, GE producers in China will not have an option to maintain their prices and will ultimately have to compromise on their profit margins by lowering the GE prices.
The needle coke (NC) prices in China continue to remain stable this week and the imported NC prices heard to be in the range of RMB 28,000 – 34,000/MT (USD 4,030 – 4,900/MT).
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