What's happening in China's Graphite Electrodes and Needle Coke Market?

The grim situation in China's Graphite electrodes (GE) market continues with prices falling to a new low. While the industrial units in the country are slowly resuming their operations, the domestic demand for steel is far from matching the pre lockdown levels that could lend support to the electrodes prices.

SteelMint has learned from its sources that the price war between the domestic players in China has increased and few manufacturers have in fact halted their production given the huge pile-up of inventory with them.

Apart from this the pandemic situation outside China is still grave and many countries continue to be under lockdown with limited industrial activities resulting in which the Chinese GE demand ex-China has also been adversely impacted.

Subsequently the impact of such unfavorable conditions is majorly seen on the price of large-sized (600mm) ultra-high-power electrodes that have touched a new low at RMB 23,500/MT - RMB 25,000/MT (USD 3,300-3,500/MT). On the other hand, the price of ordinary power and high-power electrodes continue to trend at RMB 13,000 - 14,000/MT over past few weeks.

Needle coke market overview

In the case of electrodes' raw material, Needle coke, the domestic price of the commodity continues to remain weak amid tepid GE demand. Also, the recent plunge in its input costs coal-tar and crude oil prices have further supported the fall not only in Chinese but ex-China needle coke prices.

The oil-based and coal-based needle coke prices in China are assessed to be in the range of RMB 6,000 - 7,500/MT (USD 850 - 1,050/MT). Whereas the average price of oil-based and coal-based needle coke globally at present is reported to be around USD 1300 - 1400/MT.

Outlook

The GE and needle coke prices in China will continue to remain weak as no significant uptick in domestic as well as global steel demand is expected in the near future. Also, industry experts are of the opinion that the needle coke demand from the electric vehicles (EV) segment is also likely to remain subdued in the near future amid derailment of various production plans in EV sector.