At a time when supply tightness and soaring prices of Graphite Electrodes are taking a toll on the steelmakers through the EAF route, the news of a new such plant coming up in China is an object of attention. In the Datong city, situated in the Shanxi Province in China, a 20,000 MTPA Ultra High Power Graphite Electrode plant was commissioned in Nov’17.
But, to what extend the new plant will bring in relief to the steelmakers is however questionable.
Reeling under the onslaught of sky-rocketing prices amidst severe supply squeeze, the electrode users cannot even expect any supply miracles to happen in the next five years, according to Jefferies. The supply squeeze, emanating from the shortage of Needle Coke—the prime raw material for the electrode manufacture—is arising due to more than 10% global Needle Coke production being diverted towards Lithium Ion production, and this quantum shift is likely to accelerate at a fast pace, given the growing demand for electronic vehicles – in turn strengthening demand for Lithium-ion.
The short supply in the electrodes will nevertheless continue to haunt the steel makers because initiatives to curb atmospheric pollution by various governments across the world will impart impetus to the electric arc route of steel production rather than the blast furnace method, and that will further restrict the demand from softening.