In a recently held China’s Carbon Association Sixth Five-Party Meeting and Carbon Industry Development Summit Forum, Fangda Carbon’s President as well as Association’s President, Mr.Yan Kuixing has shared his views on country’s Graphite electrodes sector future scenario and the measures that can help the industry to survive profitably amid increasing competition.
He highlighted that the key structural adjustment in China’s carbon industry is that starting from January to September this year, the proportion of UHP grade graphite electrodes in country’s total GE production has increased significantly, and its export volume has also surged by 25% y-o-y.
During the period, the output of graphite electrode was 512,560 tonne, an increase of 6%. Among them, ordinary power products were 77,991 tonne, down 35% y-o-y; HP grade electrodes were 158,156 tonne, down 6% y-o-y; UHP products were 276,413 tonne, up 43% y-o-y. In the same period, the export volume of graphite electrode was 117,883 tonne, an increase of 17% year-on-year, of which UHP reached 8,094 tonne, an increase of 26%. In the same period, the output of carbon (graphite) electrodes for submerged arc furnaces was 71,388 tonne, a year-on-year decrease of 21%.
Reshuffling in China’s GE sector is on its way
Mr. Yan pointed that the country’s GE sector is already facing the problem of overcapacity. With the gradual release of new capacity, from January to August this year, the price of 550 mm or lesser size graphite electrode has been dropped and by the fourth quarter of this year, if vicious competition is not effectively suppressed, it will be difficult to protect the 600 mm graphite electrode prices.
He has anticipated that by the second half of 2020, overcapacity will be fully manifested, and competition in some products may be more cruel. A considerable number of enterprises will suffer losses, the capital chain will be broken, production and operation will be difficult to sustain, and serious overcapacity will lead to reshuffle. Inevitably; 2021 will enter the peak period of reshuffle, which may last for 2 to 3 years during which it is expected that the competitive companies will survive while the less competitive enterprises will be shut down.
To survive mergers should be promoted
He said that the industry participants should seize the opportunity of overcapacity and face reshuffle, and promote and accelerate mergers and acquisitions. He said that by integrating and reorganizing, it will gradually form a number of carbon groups with strong economic strength, strong technical strength, perfect industrial chain, modern management and strong competitiveness in the international market. This is a long-term healthy and sustainable development of China’s carbon industry. The transformation of China from a big carbon country to a strong carbon country has important practical significance and long-term strategic significance, Mr. Yan said.
Adherence to green development
Mr. Yan Kuixing said that the country’s carbon industry must set a benchmark and strengthen energy conservation and consumption reduction management to further reduce energy consumption. In terms of environmental protection, a green carbon strategy shall be implemented, which can meet the requirements of emission standards and must invest and accelerate the upgrading of environmental protection equipment to achieve super low emissions.
Accelerate technological innovation
Yan Kuixing appealed that the country’s carbon industry should adapt to the innovative technology. He believes that China’s carbon industry is not very strong as there is gap in the raw materials and process technology software and the production equipment used are also not very technologically advanced resulting in lower productivity. Thus, under the current situation, it is recommended that the domestic enterprises should make more efforts to upgrade the equipment and the technology being used.
Leave a Reply