The reason and trend of graphite electrode price increase

At the beginning of 2017 , the average price of 500mm per ton of graphite electrode was only RMB 129,000 / ton , more than ten times higher . Analysts pointed out that the tide was far from over . The two characteristics of HP graphite electrode have been determined , and the price increase basically will be continued .

1. Supply end : long production cycle
The production cycle of graphite electrode needs to be three months and can not stop in the middle . The current heating season has a significant impact on graphite electrode enterprises . In December , many carbon factories in Hebei province have stopped production and limited production and lost a lot of capacity . At present , most of the graphite electrode manufacturers in Henan and Hebei are still in the shutdown state . According to the agency , capacity expansion is expected to be difficult before the end of the heating season on March 15 next year ; New capacity is expected to increase capacity of more than 100,000 tons of graphite electrode in June next year . Therefore , the short - term view of graphite electrodes will have a greater chance of maintaining the market in the first half .

2.Demand end: the development of electric furnace steel is the trend of the times.
Electric furnace steel is a big consumer of HP graphite electrode consumption, and the 70% demand of graphite electrode comes from electric furnace steel. And the fastest way to expand capacity is on the furnace steel making.
On the other hand, the state also expressed support for the development of electric furnace steel industry.

Luo Tiejun, inspector of the refractory raw material industry department of the Ministry of Industry and Information Technology, pointed out that the state is advocating enterprises in the "226" cities to transfer steel production capacity to the southwest, northwest and southeast coastal areas in the form of electric furnace steel.
A few days ago, the chairman admitted that the next two years China's new production capacity of electric furnace steel can reach 80 million tons.
3.In addition, restocking demand is also expected to push graphite electrodes to continue rising prices.
In terms of inventories, after a fall in October and November, stocks of graphite electrode in traders and steel mills were basically empty, and inventories in the industrial chain are now at very low levels.
According to graphite electrode enterprises, apart from the Fujian steel plants to maintain a two-month stock, domestic large and medium-sized steel plants this wave of procurement has basically completed pre-season stock.
In the near future, the possibility of price stability before the Spring Festival is greater. After the big probability of Spring Festival to early March, with the steel factory inventory replenishment and the northern region heating season before the end of the steel factory stock in advance. This will again lead to concentrated demand, when the market price of HP graphite electrodes is expected to rise again as the supply of spot inventory of graphite electrodes is insufficient.
Article Source: HP Graphite Electrode
Company name: Henan Xinmi Changxing Refractory Materials Co.,Ltd
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