China's Graphite Electrodes Market Update
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SteelMint has heard from its market sources that China's graphite electrode market continues to remain weak with production capacity far exceeding the downstream consumption rate and imbalance between supply and demand has become quite severe.
With lower operating rates of downstream steel mills, the electrodes are being purchased only on demand and the domestic prices are believed to touch bottom. The capacities of UHP grade graphite electrodes have been newly added and are being put into production resulting which the tight supply of the same has been gradually eased.
The current price of 450mm HP grade GE are heard to be in the range of RMB 13,000 - 15,000/MT (USD 1,825 - 2,100/MT) whereas that of UHP grade electrodes of size 500mm are in the range of RMB 15,000 - 22,000/MT (USD 2,100 - 3,090/MT)and 600mm are in the range of RMB 42,000 - 53,000/MT (USD 5,900 - 7,400/MT).
China is a net exporter of graphite electrodes. However, with the continuous release of GE production capacity in the domestic market, competition has become increasingly fierce and foreign markets have become a battlefield amid tough competition from various other GE producing nations.
China's GE exports in August registered a plunge of 34% M-o-M basis and stood at 34,141 tonne. However, in September, exports increased significantly, recording an increase of 38% M-o-M basis and reached the level of 47,235 tonne. Due to large exports in September, the gap in the foreign market was made up to a certain extent leading to a decline of 44% M-o-M basis in October as the same stood at 26,647 tonne during the month.
Large domestic enterprises in China have gradually invested in the ultra-high and large-size graphite electrode production capacity and the new capacity have gradually been released. Subsequently, the shortage of UHP grade GE has been eased out and it became a major commodity of exports during 2019. In first ten months of the year (Jan-Oct), China's electrodes exports stood at 0.33 MnT against 0.28 MnT in the corresponding period of previous year.
