China's Graphite Electrodes Market turns Stable amid Few Transactions

While dealing with Coronavirus outbreak, China's graphite electrodes market has resumed operations since last week and according to the market sources, buying is still low with very few transactions being reported.

However, the downtrend in GE prices that was seen before the new year holidays have stopped and the market have turned stable. The prices of HP grade electrodes of size 450mm are heard in the range of RMB 11,000 - 12,000/MT and UHP grade 600mm electrodes are in the range of RMB 28,000 - 30,000/MT.

The operating rate of graphite electrodes has further improved this week. According to few producers, although the production has not yet started in full swing, the preparations are underway. At present, the graphite electrodes transactions are relatively general. It is understood that there have been few large transactions in the market recently and sporadic small transactions.

In fact, few traders based out of China have informed SteelMint that the electrodes prices are anticipated to increase once the steel production in China resumes its pace next month i.e. in March. This is because the EAF mills usually maintain the electrodes inventory for 1.5 to 2 months before the start of Chinese New Year holidays. Now with the subsequent launch of tenders by steel mills, the electrodes' inventory is bound to deplete and the prices are expected to return to normal level. However, the price surge will be short-term phenomenon.

Although market participants are hopeful for next month, at present the downstream steel mills continue to operate at very low level. Mysteel's survey of 53 independent electric arc furnace steel plants across the country showed that the operating rate of electric furnaces this week was 5.9%, which was the same as last week, with a capacity utilization rate of 4.2%, and a week-on-week decrease of 0.06%. The electric arc furnace plant is already in a state of loss and due to the impact of transportation, the procurement of raw materials has become quite difficult.

In terms of raw material, the needle coke enterprises have not yet started fully, and the overall output is not large. This week, few needle coke companies have resumed work and it is expected that the supply situation will ease in the future.