China’s Graphite Electrodes Price Agreement with U.S. and Japanese Suppliers Edges Up

SteelMint has heard from its sources that the price contract between Chinese Graphite electrodes (GE) buyers and U.S./Japanese suppliers have risen up for the upcoming year of 2019.

The annual contract price of U.S. GE suppliers to China for the year 2019 has risen up by 20-30% against the last year prices. The contract price of UHP grade GE of size 600mm is USD 11,000 �" 12,000/MT. At present about 70% of the agreements of the U.S. electrode supplies to China for 2019 has been signed.

In the case of Japan, the 2019 contract prices with Chinese GE buyers have been locked on quarterly and half-yearly basis and have been locked at rates 15-20% higher than the U.S. contracts for 2019.

As per Chinese trade participants, the U.S. and Japanese electrodes export prices usually set the trend for country’s export prices. In case of domestic electrode prices, this week China’s UHP grade GE prices of 600mm have moved down by RMB 10,000-12,000 per tonne (USD 1,455-1,745) against last week and are currently being sold at RMB 80,000-90,000 (USD 11,600-13,000/MT).

The steel production in China has still restricted in Henan and Shandong province due to environmental inspections and thus the GE demand in the country is moving down continuously. However, the GE prices are expected to stabilize in the coming week because of firm needle coke prices.

Market sources have informed SteelMint that the GE suppliers have not received any new order this month and are executing the already concluded orders. Also the producers are not likely to resume their GE production before Spring festival in Feb’19. It is being anticipated that the demand for GE in China is likely to recover only after the Spring Festival when most of the steel mills will resume operations.

Other happenings in China’s GE industry

On 22 Dec’18, China’s Jimen Carbon located in Beufeng town of Inner Mongolia region started construction of its GE and carbon products plant. The project is likely to be completed in three phases. In these three phases, the company plans to build a GE plant (UHP grade) of 120,000 tonnes capacity by 2021.

Shanxi province which is a key GE producing province of China has achieved GE production capacity of 458,000 tonnes out of which seven new graphite electrodes companies plan to add 210,000 tonnes of capacity. In the ongoing year of 2018, the province produced 179,000 tonnes of electrodes.

In 2017, the demand for graphite electrodes in China had increased dramatically that has attracted the attention of both foreign and domestic investors. Subsequently, domestic GE manufacturers have expanded their production over last one year hoping to gain more benefits from the market that had been facing a slump in demand for a long time.