- Tight supply, pet coke price hike provide support
- Steelmakers cut output, limiting demand recovery
Mysteel Global: After falling steadily for three months straight, Chinese prices of ultra-high-power graphite electrodes stabilised in June and are expected to nudge higher this month, driven by tightening supply and higher raw material prices, according to Mysteel’s recent report on the electrode market.
As of 9 July, the composite price of 350-mm diameter UHP graphite electrodes in East China’s Jiangsu province was assessed by Mysteel at RMB 14,000/tonne (t) ($1,950/t), higher by 3.7% from a month earlier, while that of 600-mm electrodes had increased by 1.9% m-o-m to RMB 16,000/t, both excluding 13% VAT.
The decline in prices seen over the past few months had pushed many electrode producers to the brink of losing money, pressing them to reduce operations or halt production completely, Mysteel Global learned. Consequently, the market may witness shortages in some sizes and specifications of electrodes this month.
On the other hand, the rise in prices of petroleum coke from earlier this month has impacted the production costs of domestic electrode makers.
As of 9 July, for example, prices of 1# sponge coke offered by Daqing Petrochemical, a branch of China National Petroleum Corporation in Northeast China’s Daqing region, stood at RMB 4,000/t, higher by a significant 8.7% from the end of June, according to Mysteel’s tracking.
Encouraged by this, electrode suppliers are vigorously defending their selling prices, market sources observed.
However, the potential decline in electrode demand among electric-arc-furnace (EAF) steelmakers may limit the price rebound this month.
Waning steel consumption during the usual summer lull has prompted more steelmakers to rein in production, while the heavy losses they are suffering on steel sales have cooled the production enthusiasm of EAF mills.
By the first week of July, the run rates among 90 independent mini-mills under Mysteel’s tracking had fallen for a sixth consecutive week to a four-month low of just 51%.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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