- Graphite electrode prices continue to decline
- Cost and demand pressures intensify
Mysteel Global: Chinese prices of ultra-high-power graphite electrodes this month are expected to continue their downward slide that began in March, according to Mysteel’s recent report on the electrode market, warning of potential pressure from falling demand and weaker cost support.
By the end of May, the composite price of 350mm diameter UHP graphite electrodes in East China’s Jiangsu province under Mysteel’s assessment had touched a nine-month low of Yuan 13,500/tonne ($1,879/t), down by 6.9% from the end of April.
The same assessment showed that the price for 600mm electrodes had fallen by 4.8% from end-April to reach a seven-month low of Yuan 15,700/t, both excluding the 13% VAT.
Domestic demand for UHP graphite electrodes is seen weakening this month as electric-arc-furnace (EAF) steel producers may reduce their production to avoid losing more money on steel sales, according to the report.
By the end of May, the average loss on rebar sales reported by the 68 independent mini-mills under Mysteel’s tracking was at Yuan 126/t. As of June 4, this had expanded further to Yuan 139/t, the largest since August last year, Mysteel data show.
“Steelmakers will likely announce lower purchase prices for graphite electrodes to shave their input costs,” the report predicts.
On the other hand, the prices of raw materials for electrode production, such as petroleum coke and coal tar pitch, are expected to keep falling in June amid ample supply, according to the report.
The price for 1# sponge coke offered by Daqing Petrochemical, a branch of China National Petroleum Corporation in Northeast China’s Daqing region at the end of May, was Yuan 3,550/t, down by a substantial 21.1% compared with the end of April, according to Mysteel’s tracking. As such, the cost support for the prices of UHP graphite electrodes will waver this month.
Under this scenario, domestic electrode producers are planning to slow their production to mitigate exposure to heightened market competition, Mysteel’s report noted.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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