China's graphite electrode price at 23-month low
“Actually, spot market offer prices for 450mm UHP electrodes in other areas even fell below the Yuan 16,000/t threshold,” an electrode trader complained. “It seems the steady pace of the decline will continue so long as market demand stays sluggish,” he added.
However, compared with the domestic market, overseas demand remains buoyant, thanks to rising orders mainly from the countries in the Middle East, market sources said, where the higher profit margins are encouraging domestic electrode plants to sell more abroad, Mysteel was told.
China remains the world’s top maker of electrode products, with exports of graphite electrodes totalling 93,000 tonnes in the first four months of 2019, higher by 20% on year, according to a survey by Iccsino.com, a well-recognized online portal for information and trading relating to China’s graphite carbon industry.
“The cutthroat competition among the country’s electrode plants is a key driver behind the softening prices,” a graphite electrode market watcher from Tangshan city in North China’s Hebei province pointed out. She feared for China’s electrode market in the near term if there is still no remarkable pickup in demand.
But among electrode end users, the steady erosion of profit margins for EAF-produced steel is forcing some EAF mills to suspend production for unscheduled overhauls, Mysteel Global learned, with the result that demand for electrodes will weaken, further softening prices.
Indeed, the capacity utilization rate of the 53 independent EAF steelmakers nationwide which Mysteel monitors reversed down after three weeks of successive rises to average 67.25%, lower by 2.49 percentage point on week, according to Mysteel’s latest survey published on June 14.
As of June 21, China’s finished steel market was still tepid amid a softening in demand, with Mysteel's national average price of HRB400 20mm dia rebar lower by Yuan 49/t on week to reach Yuan 3,987/t including the 13% VAT, despite a third-day straight rise of only Yuan 4/t on day, according to Mysteel's data base.
Written by Rebecca Zhu, rebeccazhu@mysteel.net.cn
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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