Does China's Needle Coke and GE Market Sentiments improve after Ease of Restrictions?

With China easing the lockdown in various parts of the country and industrial activities picking up gradually, it was being anticipated that domestic GE and Needle coke prices would also move up this week supported by surge in steel demand.

However, SteelMint has heard from its market sources that situation continues to remain grim in country's needle coke market as the trade has been limited subsequently impacting its prices. The needle coke prices have fallen this week by RMB 1,000-2,000/MT (USD 141 - 285/MT) and are heard in the range of RMB 7,000 - 8,500/MT (USD 990 - 1,200/MT).

The main reason for the downtrend is the sluggish domestic downstream demand and sparse needle coke export shipments.

"Due to insufficient demand for graphite electrodes, the electrode manufacturers already have GE inventory, and their requirement for needle coke is not very strong", quoted a trader based in China.

Given the current price trend, the profit of needle coke manufacturers is meagre and the outlook for the needle coke market is slightly pessimistic.

Global COVID-19 crisis takes toll on high-grade electrode prices

Amid the ongoing crisis of COVID-19 which majority of countries are currently dealing with, the prices of UHP grade electrodes have registered a fall. This is because these electrodes have higher demand outside China. The 600mm UHP grade electrodes are currently being heard in the range of RMB 23,000-25,000/MT (USD 3,260 - 3,540/MT).

In exports market, many buyers have stopped GE purchase since the mid of last month as the situation became grim due to COVID-19. Also, the EAF mills ex-China have stocked up GE inventory in Feb'20 amid the fear of COVID-19 spread in China which has been brought under control recently. In case of ordinary grade electrodes, the prices are stable at present and are heard in the range of 13,000 - 14,000/MT (USD 1,850 - 1,985/MT).