China's graphite electrode prices to stabilize in Feb

Chinese prices for ultra-high-power (UHP) graphite electrodes are expected to remain stable this month as electrode supply and demand may both weaken as markets slow for the country's national holiday for Chinese New Year (CNY), Mysteel's latest survey suggests. The holiday will officially start from this Saturday, Mysteel Global noted.

During last month, prices for large diameter UHP graphite electrodes were under downward pressure, mainly owing to the decline in immediate demand from domestic electric-arc-furnace (EAF) steelmakers, the survey showed.

As of January 31, for example, Mysteel's benchmark price for 600mm diameter UHP electrodes in East China's Jiangsu province was assessed at Yuan 17,500/tonne ($2,462/t) including the 13% VAT, lower by Yuan 1,000/t or 5.4% on month.

"EAF steelmakers gradually reined in production in January to prepare for their holiday breaks, so their consumption of electrodes slowed down," a market analyst based in Shanghai said.

On the other hand, some small and medium-sized EAF mills had rushed to purchase some electrodes in late January to ensure they have sufficient electrode stocks for restarting production smoothly after the holidays end on February 17, Mysteel Global learned. This small spurt of buying provided some support for prices of small dia electrodes, the analyst remarked.

On January 31, Mysteel's benchmark price for 350mm diameter UHP graphite electrodes in Jiangsu stood at Yuan 15,300/t, unchanged from the end of the previous month, according to Mysteel's assessment.

Entering this month, domestic EAF mills have generally completed their replenishment of feed materials and many had halted operations already, so demand for UHP electrodes is seen waning overall, Mysteel's survey showed.

Meanwhile, many Chinese producers of these electrodes will also halt production this week to enjoy their CNY holidays, so supplies will shrink throughout the country as well, according to the survey.

As a result, China's UHP graphite electrode prices are likely to show minimal fluctuation in February, squeezed between opposing forces of supply and demand, the Shanghai analyst predicted.