How much Capacity is coming up in China’s Graphite Electrode and Anode Material Sector?

The Graphite Electrodes (GE) prices in China is at peak right now mainly boosted by synchronous augment in demand from both domestic steel and export market. In 2017, the country produced about 590,000 tonnes of graphite electrodes and based on the survey by China’s IC Carbon of 62 domestic GE manufacturers, country’s electrodes production is expected to reach about 948,000 tonnes in 2018 and about 1.35 MnT by 2020.

The upsurge in Graphite Electrodes (GE) prices since 2017 has prompted a wave of investments in China’s GE market. According to a survey by IC Carbon, China graphite electrode capacity which was 1.22 MnT in 2017 is expected to touch 1.30 MnT in 2018, 1.80 MnT in 2019 and 2.12 MnT in 2020, an increase of 88,000 tonnes in 2018, 50,000 tonnes in 2019 and 32,000 tonnes in 2020.

At present, the province with the highest GE capacity is Shanxi, followed by Henan, Hebei, and Liaoning. These four regions contribute to 0.69 MnT in country’s total GE capacity of 1.22 MnT. The other major GE producing provinces in China include Sichuan, Gansu, Shangdong, Jiangsu etc.

Capacity addition in anode material segment

In case of anode materials segment, according to a survey by IC Carbon of 17 major producers their anode capacities will reach 380,000 tonnes by 2018 and they have planned to add 571,500 tonnes of new capacities later. Adding new capacities nearly 1.5 times the existing amount will bring the total anode materials capacities of these 17 enterprises to close to 900,000 tonnes by around 2020.

Also, data from IC Carbon shows that another 12 new anode materials enterprises are planning to add 185,000 tonnes of capacity. Hence the total capacity of lithium battery anode materials in China is expected to reach 1 MnT by 2020-2025 showing the confidence companies have I the future of energy vehicle market.

Needle coke shortage

Given the capacities coming up in China’s GE and anode material segment, and GE output estimation (1.35 MnT in 2019), forecasted supplies from country’s needle coke segment (0.79 MnT in 2019) does not seem enough which may act as a hindrance for country’s EAF steel producers.