The overall operating rate of the graphite electrode market remains at a medium-to-low level.

Currently, the graphite electrode market is experiencing slight fluctuations in production. First, some enterprises have reduced their output by around 20% to 50% due to implementation of emission reduction measures; in certain regions, enterprises have temporarily suspended some processes, such as pressing, owing to weather conditions and other factors. Second, several enterprises that had previously halted production have resumed operations, and some companies have increased their output to meet earlier orders. Overall, China’s graphite electrode operating rate saw a modest increase in November; however, compared with the same period last year, the overall operating rate of the graphite electrode market remains at a medium-to-low level.

The graphite electrode market is signaling a tightening supply situation.

According to market feedback, the current graphite electrode market continues to face tight supply of ultra-small-specification graphite electrodes, while supply of ultra-large-specification graphite electrodes has become mildly tight. This situation is mainly due to the fact that graphite electrode companies previously sold products at low prices to clear their inventories, resulting in overall low inventory levels in the graphite electrode market. As downstream steel mills gradually resume stable production and demand for graphite electrodes increases, coupled with the fact that the overall graphite electrode market remains below the level of the same period last year, the market has begun signaling a tightening supply situation. Some companies report that their order books are already filled through 2021.

Downstream markets for graphite electrodes still show a wait-and-see attitude, but actual order volumes have increased somewhat.

Currently, downstream steel mills are still relatively accepting of the market price for graphite electrodes, though they remain cautious and adopt a wait-and-see attitude. At the same time, steel mills have increased the frequency of their tendering activities. Due to persistently strong prices for raw materials—iron ore and coke—steel mills’ spot prices for steel products continue to be supported. Driven by profit considerations, steel mills are actively resuming operations, and their attitude toward purchasing graphite electrodes has improved. Additionally, as winter approaches, steel mills have begun stockpiling activities, further boosting demand for graphite electrodes.

Raw material prices remain high, and the graphite electrode industry continues to suffer losses.

Recently, the upward trend in raw material prices for graphite electrodes has continued unabated, putting sustained pressure on graphite electrode costs. Based on current prices of low-sulfur calcined coke, pitch, and needle coke used in graphite electrodes, the cost of ultra-high-power 450mm graphite electrodes is approximately 17,000 yuan per ton, while the cost of ultra-high-power 600mm graphite electrodes is around 21,000 to 22,000 yuan per ton. Compared with the current market transaction prices for graphite electrodes, the overall graphite electrode market remains in a state of loss.

Graphite Electrode Market Forecast for the Future

Currently, both the supply and cost sides of the graphite electrode market are slightly favorable. Downstream steel mills also have positive expectations for graphite electrode demand. As a result, graphite electrode companies are experiencing stable shipments, and overall market sentiment is improving. Driven by rising raw material prices, most graphite electrode companies are adopting a stance of maintaining current price levels in an effort to alleviate the ongoing losses in the graphite electrode market. It is expected that next week, graphite electrode prices may see an increase, with the potential rise amounting to 1,000 yuan per ton.