China’s graphite electrodes prices that have been falling since November last year continued the trend even after the ‘Spring Festival’ break of ten days in the ongoing month of February. However, breaking the downtrend, the electrodes prices in China turned stable this week.
The prevailing prices of 450mm UHP grade graphite electrodes is around RMB 34,000 – 36,000/MT (USD 5,000 – 5,300/MT) and for 600mm the same is around RMB 60,000 – 80,000 per tonne (USD 8,900 – 11,900/MT). The price of ordinary power GE of size 300-600mm is around RMB 28,000-35,000/MT (USD 4,160 – 5,200/MT).
The falling price trend of Chinese electrodes
With the start of winter heating season last year when the construction activities slow down in China, the domestic steel prices in the country started falling and the operating rates of electric furnaces were subsequently reduced, thus impacting the graphite electrodes demand and prices.
Before the start of China’s Spring Festival in the first week of February, the electric furnaces operating rate in the country fell below 30%. Subsequently, the market demand of GE plunged and the electrodes manufacturers were left with high stocks. Even post-holidays, the demand for graphite electrodes didn’t pick up as expected and amid the high stocks, the electrodes prices in the country fell further.
Prices stabilize this week with increased exports inquiries
However, as per our market sources, the Chinese graphite electrodes prices have turned stable this week. This is because many Chinese GE producers have reported that there is the increase in the number of queries for the electrodes from the overseas buyers and although these queries are for procurement in the second quarter of 2019 (Apr-Jun), the domestic producers have turned hopeful and are contemplating an increase in their prices once again. With the tepid domestic demand, China’s electrode manufacturers are looking at the export markets to sell their products. According to industry data, the total export volume of graphite electrode in China in 2018 was 293,400 tonnes, an increase of nearly 41% against last year and is expected to grow this year.
Apart from overseas demand, one factor that may support domestic GE prices in China in the coming days is that the stocks of steel mills accumulated before the Spring Festival will be exhausted by late February and early March and that many steel mills will once again start buying GE and that mid-March will be the centralized procurement season for the companies there. Also, EAF operating rate is expected to improve in the country towards the end of the March month with the end of winter heating season which will further support the domestic GE demand and prices in China.
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