China's Graphite Electrodes Output drops by 20% Y-o-Y in Feb'20

The GE output at 18 major surveyed producers across China totalled 37,500 tonnes in February, down 20.2% y-o-y, according to data on Iccsino.com, a well-recognized online portal for information and trading relating to China's graphite carbon industry. The decline was attributed largely to the slow resumption of domestic electrode companies because of the COVID-19 outbreak in late January, market sources said.

The spread of COVID-2019 across the country from late January had seriously affected electrode makers' operations, leaving many producers at a standstill throughout the whole of last month. Towards the end of February, some electrode enterprises gradually returned to work, but their operations rate was still less than 40%, according to Mysteel's survey.

In fact, the dull state of the electrode market is in close step with China's quiet steel market. Domestic steel demand remains largely static, forcing steel mills to continue reduce output. Among electric-arc-furnace (EAF) producers, most mills are still under suspension, as steel margins are thin and steel scrap supply is insufficient. Also, operations at many scrap collecting and processing companies are still suspended which is limiting scrap availability.

As of March 5, the capacity utilization rate among the 53 EAF mills under Mysteel's survey nationwide rebounded by 3.44 percentage points on month to 7.61%, albeit still at a record low level.

"Though we have resumed operations for two weeks, the orders we received from EAF mills recently are still low," an electrode company official in East China's Jiangsu province told Mysteel. "Unfortunately, we don't expect the domestic electrode market to return to normal within this month," he added.

As of March 10, Mysteel's national benchmark price of 600mm ultra-high-power graphite electrodes in Jiangsu province continued to languish at its 34-month low of Yuan 25,000/tonne ($3,571.4/t) including the 13% VAT, Mysteel's data shows.

This article has been exchanged under the Article exchange agreement between Mysteel and SteelMint Group