China’s graphite electrodes prices have risen by RMB 3,500 – 4,000/tonne (t) ($549 – 627/t) m-o-m on the back of increasing needle coke (raw material) prices.
Prices for 600mm UHP grade electrodes are assessed at RMB 24,500/t ($3,840/t) whereas 450mm HP grade electrode prices are assessed at RMB 20,700/t ($3,245/t), on ex-factory basis.
Domestic needle coke prices in China have risen by RMB 1,000/t m-o-m amid rise in coal-tar pitch and crude oil prices that went up by an average of 10-13% in October against the previous month.
Prices for coke coal-tar pitch and petroleum-based needle coke are currently assessed in the range of RMB 10,000 – 12,000/t ($1,560 – 1,880/t).
Power rationing eases, but coal crisis still continues
According to market reports, there had been over-implementation of ‘dual-control’ policy in September that saw the local governments ordering factories to cut back operation during peak hours, in order to meet their ‘dual’ targets on total energy consumption and energy intensity (the energy use per unit of GDP).
As per the market reports, eighteen provinces and regions had enforced power rationing in the second half of September, impacting both steel production and demand.
However, from October, this power rationing eased slightly in some areas and EAF steel mills especially in Jiangsu, Guangdong and Guangxi, gradually resumed production, giving support to domestic GE demand.
But the catch here is that there has been persistent coal shortage in China since past few months, resulting which the capacity utilisations of GE units which are power-intensive have been reduced, adversely impacting the supplies and supporting its prices.
“The turn-around time for electrodes manufacturing is usually 2-2.5 months. With power rationing in late-September, GE production has been hampered and there would be shortage of electrodes in November-end or December and may even continue in January. In this chaos of reduced supplies and power crisis, electrodes manufacturers have increased their prices,” quoted a GE trader based in China.
What lies ahead?
On the supply side, with the upcoming winter season and coal shortage in the country, power crisis in the country is likely to persist which could hamper the country’s GE production. On the demand side, the country’s carbon emission reduction target would support steel production via EAF-route which is further likely to keep electrodes’ demand and prices up in the coming days.
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