What is happening in Japan’s Graphite Electrode Market?

According to the market sources, the domestic prices of graphite electrode (GE) in Japan are likely to increase in the second half of fiscal year 2019 amid the rising demand of high grade (UHP) GE from EAF (Electric arc furnace) steel manufacturers and soaring needle coke prices which is a key raw material for graphite electrodes.

The current contract prices of GE in Japan’s domestic market is being heard at 1,540,000 yen per tonne (USD 13,810/MT) and GE manufacturers may increase the prices by 30% in the latter half of FY19.

The key raw material needle coke prices have risen especially since the month of Jul’18 which has concerned the domestic EAF manufacturers in Japan. The price negotiations for GE for the second half of FY19 are in full swing and EAF producers are prioritizing graphite electrodes procurement.

The GE prices in Japan have risen by three times in the ongoing year of 2018 against previous year which has resulted in the hike in EAF steel manufacturing cost by 2,000 yen per tonne (USD 18/MT). Along with the GE cost, the price of other raw materials such as refectories and Ferroalloys have also increased in Japan which may force EAF manufacturers in future to absorb the hike in raw material prices by increasing the graphite electrodes prices.

Japan’s Graphite electrodes Export-Import in July’18

According to Japan’s Ministry of Finance trade statistics, the country’s GE export volume in the month of July was recorded at 6,366 tonnes, a fall of 4.1% y-o-y basis whereas its export prices have risen by 3.9 times to 1,110,000 yen per tonne (USD 9,954/MT) rising for 13 months consecutively and by 11.2% against the export prices in the previous month of June 2018.

On the other hand, Japan’s graphite electrode import volume decreased by 20.9% from the same month last year to 1,205 tonnes. The import average price rose to 1,380,000 yen per tonne (USD 12,375/MT) rising for 14 months consecutively. It increased by 9.9% from the previous month of Jun’18.

Out of the country’s total GE imports about 89% of the electrode import volume was occupied by small-diameter Chinese graphite electrodes and its import price rose for 15 months consecutively to 1,357,000 yen per tonne (USD 12,179/MT) in July’18 and rose by 13% against the previous month prices. However, the average price of non-Chinese graphite electrodes has been declining steadily.