- Rising production costs continue to support higher electrode prices
- Weakening domestic and export demand may cap further price gains
Mysteel Global: After rising steadily for two straight months, Chinese prices for ultra-high-power (UHP) graphite electrodes are expected to continue climbing in May, with increases in production costs for the makers seen providing major support, Mysteel’s recent report on the market predicts.
In East China’s Jiangsu province, the price of 350mm diameter UHP graphite electrodes averaged Yuan 15,914/tonne (2,340/t) during April, up 3.3% from the average price of March, while that for 600mm diameter electrodes had risen 2.7% on month to average Yuan 17,214/t, both including the 13% VAT, according to Mysteel’s assessment.
Entering this month, the prices of 350mm and 600mm UHP electrodes had pitched higher to Yuan 16,500/t and 17,800/t respectively by May 8, Mysteel assessed.
Domestic prices for low sulfur petroleum coke – one of the major raw materials for graphite electrode production – have kept rising due to the persistent tight supply, providing firm support for electrode prices, Mysteel Global noted.
For example, the price of 1 sponge coke offered by Daqing Petrochemical, a branch of China’s National Petroleum Corporation in Northeast China’s Daqing region, averaged Yuan 4,830/t in April, up 2.2% on month, according to Mysteel’s tracking.
However, China’s UHP graphite electrode prices will likely face downward pressure from waning demand in both domestic and overseas markets, Mysteel’s report warns.
The ongoing tension in the Middle East – a key export market for Chinese graphite electrodes – will continue to hinder export business and could cause domestic inventories to mount, according to the report.
In March, China exported a total of 23,800 tonnes of UHP graphite electrodes, lower by a significant 33.4% compared with the same month last year, according to statistics from the country’s General Administration of Customs.
Meanwhile, electrode demand among Chinese electric-arc-furnace (EAF) steelmakers is seen waning in May, as the EAF mills have reined in production in response to negative profit margins and shortages of steel scrap, Mysteel’s other survey showed.
By May 7, the average capacity utilization rate among the 94 independent EAF steelmakers under Mysteel’s tracking had dropped for four consecutive weeks to 60%.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
Leave a Reply