Graphite Electrode consumption in China is expected to be robust in Mar’18, and signs are ample that the prices will hover at highs according to ICCarbon China – a market intelligence organization.
Post the Lunar Year holidays in China, Graphite Electrode manufacturers there have raised their production levels in view of the strong consumption to take place immediately after the holidays. Even during the holidays, most electrode producers maintained normal production as they had signed delivery contracts for Mar’18. Moreover, they also had already signed delivery contracts for the second quarter, necessitating ramping up their production rates.
In Mar’18, the Electric Arc Furnace (EAF) steel producers in China are expected to bid aggressively as they are resuming full-fledged production activities. Driven by the strong off-take, inventories at the electrode factories in the country have almost ran nil.
With the acute supply tightness ruling the market, prices of the electrodes, post the holidays, have been firm. The prices of: UHP grades of 450mm, 550mm and 600mm specifications were up to around Yuan 115,000/MT, Yuan 140,000/MT, and Yuan 160,000/MT respectively; while, the prices of the HP grade of 400mm specification also went up.
According to the available statistics from China Carbon Industry Association, the total output of graphite electrodes in China in 2017 amounted to 590,000 tons, out of which, the total output of HP and UHP grade graphite electrodes is about 445,000 tonnes.
Prices of Calcined Petcoke, a key ingredient in Needle Coke production, went up in the key international markets significantly in Jan’18; however, with the winter season coming to an end, Petcoke production is expected to go up, and that is likely to bring down the prices in the coming days. Needle Coke is the vital input in Graphite Electrode manufacturing. The prevailing prices of domestic coal based Needle Coke in China are at around Yuan 23,000-27,000/MT, while, refinery based Needle Coke prices are at Yuan 21,000-24,000/MT.
Needle Coke prices of Philip 66 are: HNP—USD 2500/MT, HSP—USD 2800/MT, HBA—USD 1800/MT. And prices quoted by Mitsubishi Chemical are: USD 3500-3800/MT, and PMC has quoted the prices at USD 3200/MT.
In 2018, there is a prospect of Chinese imports of Needle Coking coming down as new capacities are expected to start commercial operations in China. In the current year, new Needle Coke capacities of Fang Daxing Kemo, Shandong Yi large and Shandong Jingyang are going to come on-stream. In 2017, the coke imports in the country were at 170,000 MT, and the domestic production at 153,000 MT.
Going forward, consumption of the electrodes will strengthen substantially from Mar’18 as the steel mills in the country are expected to procure vigorously. Moreover, the total EAF capacity in China will also go up in 2018 as several such capacities constructed in 2017 will come on-stream in 2018—to trigger stronger electrode demand.
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