The GE prices in China have been stable over the past few weeks with no major increase, contrary to what was being anticipated by the electrodes suppliers as the Chinese government lifted the duty on scrap imports starting 1 January 2021.
China announced its decision to allow free imports of scrap starting 2021 as the same was banned in 2017 under its policy of ‘Zero solid waste import’.
The GE manufacturers in China were hoping that this decision by the government would boost the steel production via EAF route and so would the electrodes demand. However, China’s move to allow ferrous scrap imports is having a limited impact on domestic steelmaking via EAF route amid lack of scrap availability globally and its elevated prices.
Scrap prices are also at elevated levels amid limited scrap availability, making EAF steel production not a lucrative alternate.
The current prices for GE are assessed at RMB 15,500-16,000/t ($2,300-2,400/t) for 450mm HP grade and RMB 20,000-20,500/t ($3,080 – 3,150/t) for 600mm UHP grade.
This week downstream manufacturers have started preparing for Chinese New Year holidays and are stocking up electrodes. The market consumption is mainly dominated by small-sized electrodes as against large-sized ones.
China has exported about 0.30 mn t of GE during Jan-Nov’20, down by 17% y-o-y basis mainly due to COVID-led reduced global demand. The exports have reduced despite lower prices. The average export price during the said period of 2020 stood at $2,425/t against the average price of $6,250/t for the same period last year.
Outlook
The Chinese GE prices are expected to remain at similar levels before Chinese New Year holidays. The demand for large-sized Chinese electrodes is good outside of China and the sellers are focusing on exports to markets such as India.
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