Strong demand from downstream sector pushes up China's GE prices
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The sentiment in China's Graphite electrodes (GE) market is quite stable and the manufacturers' quotations increased from the beginning of the month.
The electrode manufacturers have increased prices owing to low inventory and increased raw material (needle coke) cost. Entering November, steel mills began to implement production restrictions, but this year the demand for raw materials including GE has not decreased too much in November.
As the sentiments in the steel market is improving, production enthusiasm for downstream electric furnace steel has increased. Also due to the pandemic many small-sized GE units have shut shop resulting which the supply of small-size graphite electrodes has become tight and the confidence of other GE manufacturers boosted.
The current offers for 450mm HP grade electrodes are assessed at RMB 14,000-14,2000/t ($2,130 -2,160/t), and 600mm UHP grade at RMB 19,000 - 20,500/t ($2,890 - 3,120/t).
The needle coke manufacturers' quotations are relatively strong due to rising demand from electric vehicles' battery segment. The prices of oil and coal-based needle coke are in the range of RMB 5,500-7,500/t, ex-factory basis. Although prices have risen recently, needle coke companies have limited profits under increased cost pressure.
Outlook
Downstream steel mills are yet to stock up GE for winters, but the price of needle coke has risen and the production cost of GE manufacturers is under greater pressure. Thus, it is expected that electrode manufacturers may adjust electrodes prices upwards in the short-term on higher input costs.
