China’s aggressive environmental protection campaign has tightened supplies of graphite electrode. Nearly 300,000 tonnes of graphite electrode manufacturing capacity has been shut since the second half of 2016, creating a global shortage and lifting prices by over 300% since January 2017.
Presently prevailing volatility has made the market fairly unpredictable leaving trade participants exposed to the possibility of violent fluctuations. Experts from world over have been minutely following updates in the industry to foresee even the slightest variations that could disturb up the delicate trade balance.
SteelMint’s one day Global Graphite Electrode Conference will address the future demand/supply scenario of Graphite Electrode in 2018, in the context of sky-rocketing prices in the last year, uncertainties surrounding needle coke supply, how China will regulate the global markets, and an assessment of the challenges faced by the Indian buyers.
Events that led to the sudden price boom
—China’s crackdown pollution: The global steel power house–China cracked the whip on emission intensive industries to fight pollution starting December 2016. Bearing the heaviest brunt were the obsolete Induction Furnaces and to some extent the Chinese graphite electrode manufacturing industries which are believed to be heavily polluting. The impact of the crackdown began to reflect in markets over the next four months and prices began to rise since February-March.
—Hurricane Harvey disrupts needle coke supply: To further add to the instability in Graphite electrode markets the temporary shutdown on Needle Coke manufacturing units and Refineries in the United Nations owing to a hurricane in the Gulf of Mexico in August further stifled supply.
—Limited suppliers: There are merely 8 major manufacturers of graphite electrode across the globe that had reduced capacity due to an oversupply situation before 2016. Not only graphite electrode production is limited there also exists a severe dearth of Needle Coke supply which in turn has led to the price escalation.
However there are a number of question that require answers to better understand the future course of the market
- What would be the global demand-supply scenario for graphite electrodes?
- What are the estimates for price movements?
- For how long would uncertainty in needle coke supply continue?
- How will fast growing lithium ion battery market impact graphite electrode market?
- What are the present trends in Chinese markets?
- Will China continue to develop EAF capacity?
- Where and when will the additional graphite production capacity come from?
- What remains in store for Indian buyers?
- Perspective from global graphite electrode buyers