“Domestic electric-arc-furnace (EAF) steelmakers have gradually resumed steel production, but the stocks of graphite electrodes they accumulated before the Chinese New Year break should last them for at least one to two months,” a Shanghai-based market source commented.
As of March 26, the capacity utilization rate among the 53 EAF mills under Mysteel’s survey nationwide had increased by 14.4 percentage points on week to a still low 40.3%, Mysteel’s data shows.
In addition, as the virus continues to ravage more countries abroad, the export trade in Chinese electrodes has dried up considerably, and overseas buyers are showing little interest in buying during this period, Mysteel Global noted.
Over January-February, China’s exports of graphite electrodes increased 9.79% from December to 46,000 tonnes, according to statistics from China Carbon Industry Association. “Although exports were high, most were based on orders signed last October. Overseas buyers’ recent inquiries and bids have declined sharply,” Mysteel Global was told.
Domestic prices of steel scrap have also trended downward lately, with the market transaction price of 6-8mm common-grade carbon steel scrap in Zhangjiagang city in Jiangsu edging down Yuan 160/t on month to hit a 16-month low of Yuan 2,190/t excluding 13% VAT as of April 1.
“Even before the COVID-19 outbreak, we were not very optimistic about the domestic electrode market because of the weak demand, and now with the virus spreading, the chances of making a sale are getting even smaller,” an electrode company official from Southwest China’s Sichuan province admitted. Any reversal of the long-term weakness in UHP grade electrode prices is hard to imagine in the near term, Mysteel predicted.
This article is exchanged under the ‘Article Exchange Agreement’ between Mysteel Global and SteelMint
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