Chinese Graphite Electrodes Prices Continue to fall in Third Week of Dec'18

The Chinese graphite electrodes (GE) prices which have been falling especially since the start of December month have continued the trend this week also amid the production cuts happening due to winter heating season.

As of this week, the prevailing prices for 450-500mm UHP grade electrodes are assessed at RMB 48,000-50,000/MT (USD 6,950�" 7,200/MT), 600mm UHP electrode at RMB 88,000-108,000/MT (USD 12,740�" 15,640/MT) and 700mm UHP electrodes at RMB 100,000-135,000/MT (USD 14,480 �" 19,550/MT).

The price drop in case of small diameter electrodes 400-500mm (RMB 5,000-10,000) is higher as compared to those with 600mm and above (RMB 2,000-5,000).

However, as per the market sources, some of the GE manufacturers did not follow the downtrend this week and kept themselves out of the market. This is because these manufacturers believe that the domestic GE prices will revive a bit in the last week of December which is the tender period of the month. It refers to the time period before the expiry of the contract and gives members of the contract the flexibility to make decisions till the time the contract expires. In the tender period, it is expected that steel mills may increase their production volumes to meet the monthly quota and so will the demand for GE surge, thus positively impacting its prices.

On the other hand, one set of industry participants are of the opinion that GE prices will continue to remain soft till the first quarter of 2019 i.e. till March amid winter production cuts to control pollution levels.

In case of raw materials, the contract price of imported needle coke electrodes is RMB 29000-31000/MT (USD 4,200-4,500/MT) whereas its spot prices are RMB 33,000-34,000 yuan per tonne (USD 4,800-4,900/MT) and it is being reported that the import prices of key GE manufacturing units have not been finalized yet for the first half of 2019.

The overall situation of needle coke market in China remains weak as it is constrained by the limited demand from downstream industries especially the graphite electrode market. With the upcoming Spring Festival in China in the month of Feb’19, the Chinese steel mills stills will be more focused on shipments rather than on production and thus it is being anticipated that there will be some downtrend in the needle coke prices in January 2019.