Graphite electrode: Profit upside down, when will the market get better?

In 2022, the graphite electrode market experienced a rise from January to May, a horizontal consolidation in June, and a continuous decline from July to September. Since the second half of the year, the price of graphite electrode products has been significantly lower than the cost of raw materials, and electrode enterprises have been producing at a loss. At present, most of the enterprises that can normally produce are concentrated in several head manufacturers, and smaller manufacturers have reduced production or switched to graphite products such as crucibles. 

UHP (ultra-high power) 600mm graphite electrode is quoted at 22500-23500 yuan/ton. The actual transaction price is mostly subject to single negotiation, and the actual price is even lower. In June, UHP 600mm graphite electrode price was as high as 29500 yuan/ton, and the market price fell by 23.73% in two months.

Although the price of graphite electrode products has dropped significantly, the cost side remains high. From July to September, needle coke as the raw material of UHP electrodes, the market maintained a slow downward trend. Therefore, since July, the production of graphite electrodes has entered a loss period, with an average profit of - 489 yuan/ton in July and - 2009 yuan/ton in August.

With the upside down of production and profits, the operating rate of the graphite electrode market has been declining. As of August, the operating rate of the electrode market was about 35%, down 6% month-on-month and 27% year-on-year. The graphite electrode market has entered a situation of weak supply and demand. Fangda, Henan Pingmei, Jilin Carbon, Fushun, Bashan graphite and other leading enterprises insist on production. Most small enterprises with low output have turned to the crucible, graphite plate, or graphitization processing, etc. for the anode materials market.

The downstream of graphite electrode is mainly electric arc furnace steelmaking. The traditional peak season of real estate and infrastructure is coming. In September, the production of steel plants gradually increased, in particular, many manufacturers in the early stage of continuous maintenance have resumed production. The capacity utilization rate and operating rate of independent electric arc furnace plants may increase slightly. The arrival of traditional "golden September and silver October" will have a positive effect on graphite electrode market. The transaction prices of some manufacturers have rebounded slightly, so in September to October, graphite electrode market will have a certain warming performance. Graphite electrode market subsequent reports, please pay attention to us.