After a month of stability, UHP grade GE (Graphite electrodes) prices in China have registered a fall of RMB 1,000-1,500/t (USD 142-215/t) in the July month so far.
The current offers for 600mm UHP grade electrodes are reported to be at RMB 19,500-21,500/t ($2,785 – 3,071/t).
The market sources reveals that, as the lockdown measures eased across various countries in June, the export inquiries for the Chinese electrodes increased. Amid this, the Chinese GE suppliers didn’t lower their price in anticipation that increased export inquiries would support the electrodes prices.
However, this didn’t happen as the market had enough stock of high-grade electrodes, and buyers in the export market showed their reluctance to pay the prices quoted by the Chinese sellers. With no options left, the sellers had to ultimately lower their prices.
“The demand recovery from the overseas market has been good and the backlog of early orders has started clearing. However, the steel mills abroad are avoiding inventory pileups given the uncertain market situation and raw materials such as GE are being purchased only on demand”, quoted a trader based in China.
In case of lower grade electrodes, the prices continue to remain stable. This is because although downstream mills have started their operations in China, many of the HP and ordinary power grade electrodes manufacturers have suspended their production amid poor demand due to pandemic situation in the last few months.
The current offers for 450mm HP grade electrodes are reported to be at RMB 12,500 – 13,800/t ($1,785 – 1,970/t).
Outlook
The GE prices are likely to remain vulnerable in the upcoming months till the pandemic situation is controlled a bit especially in the export market.
(Exchange rate: 1 RMB = 0.14 USD)
Chinese GE exports rises in 2020
- China’s GE exports during Jan-May’20 have recorded an increase of 7% y-o-y at 142,623 tonne against 132,800 tonne in same period last year.
- This can be attributed to increased exports of 25% y-o-y during first three months (Jan-Mar) of 2020. Whereas in remaining two months i.e. Apr-May, the exports plunged by 12% y-o-y basis.
- The highest exports were recorded to Russia (27%) followed by Azerbaijan (13%) and U.S (6%).
- In case of Russia, unlike steelmakers in other regions, Russian producers did not idle complete capacity amid the pandemic, but extended maintenances and lowered capacity utilisation in order to reduce output, resulting in consistent demand for GE.
- Market sources have revealed that China has diverted its GE exports to Iran via Middle East country, Azerbaijan.
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