China UHP graphite electrode prices to slide further in January

• Weak steel demand pressures UHP graphite electrode prices
• EAF maintenance cuts electrode consumption further

Mysteel Global: Chinese prices for ultra-high-power (UHP) graphite electrodes will probably continue to soften this month due to weaker demand, Mysteel’s recent report on the market predicts.
Last month, the six-month rise in the country’s UHP graphite electrode prices came to an end amid lower electrode consumption among steelmakers, while cost support also wavered, Mysteel’s survey showed.

As of the end of December, the price of 350mm diameter UHP electrodes in East China’s Jiangsu province stood at Yuan 14,900/tonne ($2,134/t), down by 2% from a month earlier, while that for 600mm diameter electrodes in the province had dropped 1.8% on month to Yuan 16,500/t, both excluding the 13% VAT, according to Mysteel’s assessment.

Electric-arc-furnace (EAF) steelmakers have slowed their purchases of electrodes as maintenance stoppages have impacted their steel production and furnace charging rates, Mysteel’s survey showed.

During December, the average operational rate among the 90 independent EAF mills across China under Mysteel’s tracking was 68.1%, lower by 0.3 percentage point from the average in November.

Entering January, more mills are scheduled to undergo plant overhauls ahead of the Chinese New Year holiday that will fall in mid-February, so demand for electrodes may shrink further, Mysteel’s report observes.

Meanwhile, UHP graphite electrode manufacturers are eager to sell their products to recover cash flow, which is likely to cause industry competition to intensify and lead to further price reductions, the report warns.

On the other hand, after sliding steadily in December, so far this month the prices of raw materials for graphite electrodes have not shown any sign of recovery, another factor weighing on electrode prices, Mysteel’s survey suggests.

By January 6, 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, was Yuan 4,350/t, lower by 2.7% from a month earlier, according to Mysteel’s tracking.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.