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Graphite Electrode Crisis to Deepen further

May 21, 2019
1.In recent years electrode makers have reduced capacity, with some shuttered for good as their mill customers bought competitively priced semi-finished products and re-rolled rather than melting scrap. At the same time China has cut graphite electrode capacity of late, by up to around 50%, according to numerous producers, amid government-mandated closures to curb emissions.This means the country is producing much fewer ladle furnace electrodes.
2.In mid-2018 the real crisis for Graphite Electrodes will begin. Supply tightness and high prices of Graphite Electrode in 2017 – was a preamble. There will be three main strands for crisis in the Graphite Electrode market: Rising Chinese Electrode consumption and restricted exports, EAF route gaining popularity worldwide and Needle Coke prices soaring 4 times from early 2017 levels. Because of the scale and complexity of what lies ahead, steelmakers through EAF route should expect more turbulence over the year ahead on account of further dwindling supplies of Graphite Electrodes and soaring prices.

3.Steel manufacturers and traders have since long been hoping for the storm in Graphite Electrode market to settle, but if experts and present trends are to be believed the crisis seems to be far from over. Graphite Electrode market might possibly be heading towards a far more turbulent year as compared to 2017 which saw an unprecedented bull rally in prices. Demand supply dynamics of the valuable commodity required for steel production via the Electric Arc Furnace (EAF) route stands significantly imbalanced with demand rising at a brisk pace while production remaining still.
4.Graphite Electrodes are a key raw material for production of steel through the Electric Arc Furnace (EAF) route and until recently accounted for a negligible portion of total cost of production. However it was in the beginning of 2017 that the prices of GE began to rise and gradually the much needed raw material started to make steel producers sweat.
5. Prices of GE had gone up multi fold by September owing to a slew of factors including clamp down on polluting industries in China and GE production capacity cuts that took place between 2012 to 2016. According to experts, the turmoil in the GE markets are far from over and event of 2017 stand as a mere glimpse of what the present financial year has in store for the sector.  Going by present trends in production and demand, price of the commodity are pegged to rise further. Not just price of GE but its availability may also become a major challenge for producers.
*source:http://www.adbrain.org/Instructions/20190509/56.html
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