There seems to be no stopping to price plunge in China’s graphite electrodes prices. According to SteelMint sources, the GE prices in China have fallen further this week and the prevailing prices of 450mm UHP grade electrodes are heard to be at RMB 33,000 – 35,000/MT (USD 4,915 – 5,213/MT) whereas that of 600mm is heard to be around RMB 60,000 – 65,000/MT (USD 8,940 – 9,682/MT).
However, few industry participants are of the opinion that the Chinese GE prices may stablise in the coming weeks as GE prices have almost come to the levels of cost of production and it will be difficult for the producers to further lower down their costs.
With the fall in graphite electrodes prices, the Chinese manufacturers have to compromise heavily in their profit margins, thus adversely impacting needle coke prices. While the price of needle coke in China began to decline from January 2019, it registered a sharp fall in mid-March. For instance, the domestic needle coke prices in China have fallen from RMB 33,000 – 34,000 (4,915 – 5,000/MT) IN the beginning of the year to RMB 22,000 – 23,000/MT (USD 3,200 – 3,426/MT) at present.
However, the needle coke prices are still being supported by positive demand from lithium-ion battery segment. Thus, domestic needle coke manufacturers are no longer worried about falling GE prices and are focusing on lithium-ion battery segment.
According to industry statistics, in the first half of 2019, four factories are expected to join in the production of needle-shaped coke products with a total capacity of 190,000 tonne.
However, there won’t be an oversupply of needle coke in the first half given the fact that it takes time to manufacture quality products. Also, the existing manufacturers such as Shanghai Baosteel, Jinzhou Petrochemical and Fangda Xikemo have a maintenance plan in May due to the current price decline, which means that the first half of needle coke market there is no substantial risk of excess supply and thus price fall in case of needle coke may be moderate.
Leave a Reply