China graphite electrode prices to rebound in April
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After sliding during March, Chinese prices of ultra-high-power (UHP) graphite electrodes are expected to pick up overall this month as supplies of electrodes may tighten, while cost support for the prices is likely to stay firm, Mysteel's latest monthly report on the commodity suggests.
Last month, steel production among Chinese electric-arc-furnace (EAF) was lower than market players had expected, and the EAF makers' weak demand for feed materials led prices of graphite electrodes to move downward, Mysteel Global noted.
As of end-March, Mysteel's benchmark price for 350mm diameter UHP electrodes in East China's Jiangsu province stood at Yuan 14,700/tonne ($2,071/t), lower by Yuan 300/t on month, the report noted, while that for 600mm electrodes also dropped by Yuan 300/t on month to reach Yuan 16,900/t, both including the 13% VAT. Entering this month, prices have remained stable so far, however.
The price decline caused more electrode producers to lose money when selling their products, a market analyst based in Shanghai observed, adding that many plan to scale back their production this month to ease their losses. "Some companies have decided to reduce their UHP electrode output by around 20%," she remarked.
On the demand side, even though EAF steelmakers reined in their production at the end of March in response to their large losses on steel sales, their output may not drop significantly this month, the analyst maintained, pointing out that steel demand remains resilient as spring is China's peak season for steel consumption.
As such, UHP graphite electrode prices will gain some support from the shrinking of supply, Mysteel Global noted.
On the other hand, as prices of raw materials used in graphite electrode production are still strengthening, this is providing continuous cost support for electrode prices, the report showed.
For example, Mysteel's assessment of medium-temperature coal tar pitch in North China's Hebei stood at Yuan 5,700/t including the 13% VAT as of 8 April, higher by Yuan 300/t on month.
Note: This article has been written in accordance with an article exchange agreement between MySteel Global and BigMint.