The Chinese GE market that went completely silent in past two weeks amid the outbreak of Wuhan Virus also known as Coronavirus is slowly restoring its operations, SteelMint has heard from its market sources.
The overall operating rate is not very high and the market is still in its recovery stage. Due to the virus outbreak logistics and transportation have become difficult and spot transactions are not large. On the other hand, downstream steel mills are also operating at a similarly low rate.
“Even before the epidemic spread, the GE suppliers had high electrodes inventory amid the tepid domestic demand and excess production resulting which manufacturers will be going slow in their production”, quoted a market participant based in China.
The current prices for HP grade electrodes of size 450mm are heard in the range of RMB 12,000-15,000/MT (USD 1,720 – 2,150/MT) whereas that of 600mm UHP grade are in the range of RMB 27,000 – 30,000/MT (USD 3,870 – 4,300/MT).
The varied impact on foreign countries
Given the current situation, the export queries for Chinese GE from the overseas market is very subdued, thus giving scope to the electrodes manufacturers based in other countries especially India to ramp up their supplies in the international market – where China have major supplies, said a GE trader based in India.
In 2019, China exported about 397,807 tonnes of GE with highest percentage of about 17% going to Malaysia followed by Turkey (8%), Russia (7%) and South Korea (7%). In case of India, the country exported about 58,893 tonnes with South Korea having the highest share of 15% followed by Egypt 12% and Turkey 9%. This means that Turkey and South Korea were two common GE export destinations for both China and India.
Iran – which was a major export country for both India and China, is facing U.S. sanctions especially over past one and a half year. According to the reliable sources, while India has completely stopped its GE supplies to the former, China is still supplying the same to Iran via other countries like Malaysia thus resulting in circumvention of sanctions. Now with China currently being under virus attack, electrodes supplies to Iran from Beijing may face some disruptions especially till the end of first quarter ending in March 2020.
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