The price of graphite electrode today is 25,420 yuan / ton, an increase of nearly 7% compared with last week, and a price increase of nearly 30% during the year.
On the one hand, the price increase of graphite electrodes is due to rising costs, and on the other hand, the production start-up continues to be limited.
Since the beginning of this year, the price of petroleum coke upstream of graphite electrodes has continued to rise. As of April 28, the price of low-sulfur petroleum coke has generally increased by 2700-3680 yuan / ton compared with the beginning of the year, with a comprehensive increase of about 57.18%. Since last year, due to the rapid development of anode materials, anode material enterprises have a large demand for graphitization processing and graphite crucibles. As a result, some graphite electrode companies have switched to negative electrode graphitization and negative electrode crucibles under the influence of profits. This leads to the shortage of resources for the graphitization and roasting process of the graphite electrode market, and the increase of the cost of graphitization of the graphite electrode.
Beginning in October last year, due to the environmental protection production restrictions in autumn and winter and the impact of the COVID-19, the resumption of production in the graphite electrode market has continued to be limited. As of the end of March, the overall operating rate of the graphite electrode market was about 50%. Under the dual pressure of high cost and weak downstream demand, some small and medium-sized graphite electrode enterprises have insufficient power for production. At the same time, in the first quarter, China's imported needle coke decreased by about 70% year-on-year, and the overall production of the graphite electrode market was insufficient.
Graphite electrode material is an important material for electric furnace steelmaking. Since electric arc furnace steelmaking is more environmentally friendly than blast furnace steelmaking, in recent years, the policy has mainly shifted to electric arc furnace steelmaking. In 2021, my country's electric furnace steel will account for 15% of the total crude steel output, up 5% from 2020. The increase in the proportion of electric arc furnace steelmaking drives the demand for graphite electrodes. In this context, the proportion of electric arc furnace steelmaking may increase rapidly; we expect that the demand for the graphite electrode industry will continue to rise.
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