The pessimism in Chinese GE market continues amid dull downstream demand. The electrodes manufacturers are under pressure due to high inventory. The steel mills are suffering from high raw material costs (scrap prices) which are resulting in the limited margins.
The operating rate of steel mills is not high and is about to usher in the “heating period”. The environmental protection policy for winter season starting from Nov’19 to Mar’20 is set to have a certain degree of impact on the operating rates of the steel mills resulting which the graphite electrode digestion rate is limited.
According to the market sources, the price of ordinary, high-power, ultra-high-power small-size graphite electrodes has been bottomed out, and in case of large size (700mm) UHP grade electrodes, the new capacity is gradually being released.
The current price of 450mm HP grade GE are heard to be in the range of RMB 13,000 – 15,000/MT (USD 1,825 – 2,100/MT) whereas that of UHP grade electrodes of size 500mm are in the range of RMB 15,000 – 22,000/MT (USD 2,100 – 3,090/MT)and 600mm are in the range of RMB 42,000 – 53,000/MT (USD 5,900 – 7,400/MT).
The current export price for UHP grade electrodes of 600mm from China are heard to be in the range of USD 6,000/MT (CFR Europe).
Nanjong Juchun Carbon, a Hebei based GE manufacturer with a capacity of 60,000 tonnes have resumed production that was suspended last month because of environmental protection policy ahead of National Day Holiday on 1 Oct’19. The company majorly focuses on RP grade electrode production. The company has produced about 40,000 of electrodes in 2018 and is likely to have an output of 30,000 tonnes this year.
In terms of raw material, the needle coke prices in China have registered a fall of RMB 2,000-3,000 M-o-M basis and are currently being heard in the range of RMB 15,000-16,000/MT (USD 2,100 – 2,200/MT).
Leave a Reply