- EAF mills rein in output amid weak steel demand during traditional off-season
- Raw material costs remain soft, exports to stay weak amid Middle East conflict
Mysteel Global: Chinese prices of ultra-high-power (UHP) graphite electrodes are expected to continue tracking lower mildly in July as cost-side support is eroding, while demand for electrodes among industrial enterprises weakens, Mysteel’s recent report on the market predicts.
Domestic UHP graphite electrode prices had fallen steadily in June. In East China’s Jiangsu province, prices of 350-mm diameter electrodes averaged RMB 15,881/tonne (t) ($2,337/t), lower by 3.6% from the previous month, while that of 600mm diameter electrodes slumped by 5.3% m-o-m to RMB 16,810/t, both including the 13% VAT, according to Mysteel’s assessment.
Prices of major raw materials for UHP graphite electrode production, such as petroleum coke and coal tar pitch, hovered at relatively low levels over June after falling rapidly in the prior month, and prices are unlikely to show any significant recovery in July, Mysteel’s report suggests.
For example, by the end of June, the price of 1# sponge coke offered by Daqing Petrochemical, a branch of China’s National Petroleum Corporation in Northeast China’s Daqing region, stood unchanged from a month ago at RMB 4,400/t, according to Mysteel’s tracking. Entering this month, prices slipped to RMB 4,180/t as of 7 July.
On the other hand, electrode consumption among Chinese steel producers is expected to decline further in July, as electric-arc-furnace (EAF) mills have started to rein in production in response to lukewarm downstream demand in the traditional off-season for steel consumption in China, Mysteel’s survey showed.
The average capacity utilisation rate among the 94 independent EAF steelmakers nationwide under Mysteel’s tracking had fallen for two straight weeks to sit at 61.6% over 26 June-2 July.
Overseas demand for Chinese electrodes will likely remain lacklustre in the coming weeks due to the ongoing conflict in the Middle East — a key export market for Chinese graphite electrodes, as reported.
In May, China exported a total of 24,883 tonnes of UHP graphite electrodes, down 1.8% m-o-m and lower by 7.3% compared with the same month last year, according to the latest statistics from the country’s General Administration of Customs.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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