Forecast of Needle Coke Demand for Negative Electrode Materials in the Second Half of 2023

1. Review of the Needle Coke Market in the First Half of 2023

In the first half of 2023, the needle coke market remained weak, with prices declining by 32.6% compared to the beginning of the year, reaching an average of 7788 yuan/ton by the end of June. The market was affected by subdued downstream demand and sufficient supply of needle coke. Many enterprises faced high inventory levels, leading to a continuous downward pressure on prices. Relevant graphitized petroleum coke market situation for your reference. 

Raw Materials Aspect

In the first half of the year, raw material prices also declined due to the drop in international crude oil prices, negatively impacting the low-sulfur slurry market and further affecting needle coke prices.

Downstream Aspect

In the electrode materials industry, there was an accumulation of raw material, semi-finished, and finished product inventories. Demand for electrode materials sharply decreased, resulting in low operating rates for the needle coke market. Demand from the graphite electrode market provided short-term support before the Spring Festival, but the continuous decline in steel prices caused electric arc furnace steel enterprises to sustain losses. This led to a weak demand for needle coke in the graphite electrode market, with just enough to meet immediate needs.

2. Supply and Demand Situation of Needle Coke in the Negative electrode Material Market in the First Half of the Year

According to statistics, the total supply of domestic Negative electrode coke in the first half of 2023 was 286,400 tons, with domestic production supplying 257,800 tons, a decrease of 320,000 tons or 56.13% compared to the first half of 2022. Import supply of Negative electrode coke from January to June was 28,600 tons. Due to the drastic drop in demand for Negative electrode materials with the subsidy policy adjustment, a large amount of raw materials, semi-finished, and finished product inventories accumulated in the first half of the year. Negative electrode materials were purchased on an as-needed basis. On the supply side, coal-based needle coke production profit margins were inverted, leading some enterprises to produce pitch coke. Other coal-based needle coke enterprises stopped production for maintenance.

Due to weak demand for Negative electrode materials and high inventory levels at oil-based needle coke manufacturers, most needle coke manufacturers reduced production loads and adopted flexible production plans to cope with the challenging market conditions.

3. Supply and Demand Situation of Needle Coke in the Graphite Electrode Market in the First Half of the Year

According to statistics, the total supply of domestic electrode coke in the first half of 2023 was 162,600 tons, with domestic enterprises supplying 132,300 tons, a decrease of 93,100 tons or 40.83% compared to the first half of 2022. Import supply of electrode coke from January to June was 30,300 tons. The production of graphite electrodes in China increased initially but declined later, resulting in an overall decrease in monthly output compared to the previous year. The drop in electric arc furnace operating rates affected downstream demand, and the pressure of graphite electrode inventory caused the market to remain cautious. Most graphite electrode enterprises maintained low production levels, and there was a considerable amount of product inventory awaiting consumption.

4. Forecast of Needle Coke Demand for Negative electrode Materials in the Second Half of 2023

Based on forecasts, the production of power batteries will increase in the fourth quarter, leading to a significant increase in demand for Negative electrode materials, including needle coke, starting in October. It is estimated that the demand for needle coke in the Negative electrode materials market will reach approximately 385,000 tons in the second half of the year, representing a 72.6% increase compared to the first half. For more detailed predictions on the August Negative Electrode Materials Market, feel free to contact us.