Supply side and demand side game, how does the graphite electrode market trend?

Under the influence of the continued weak downstream demand, the current graphite electrode market price operation is slightly chaotic, graphite electrode market performance is poor, the price is weak operation. within August, graphite electrode enterprises offer two downward adjustments, the range of 2,000-3,000 yuan / ton. As of August 29, the mainstream price of graphite electrode diameter 300-600mm in China: ordinary power 19000-21000 yuan/ton; high power 19000-22000 yuan/ton; ultra-high power 20000-24500 yuan/ton; ultra-high power 700mm graphite electrode 27000-29000 yuan/ton. Specific impact factors are analyzed as follows.

First, the demand side continues to be weak, negative graphite electrode market consumption

In August 2022, some regions are affected by high temperature and power restrictions, the downstream market capacity production is limited, and the demand for graphite electrodes is always weak.

The status quo of the poor performance of the terminal steel market has not yet improved. According to the China Iron and Steel Industry Association, the steel industry economy showed a significant downward trend from January to July this year, and there was a monthly industry-wide loss in July, with a significant decline in corporate efficiency. In addition, from mid-August, affected by high temperatures and power restrictions, the southwest (Sichuan, Guizhou, Yunnan, Chongqing) area electric furnace steel plant basic shutdown, and silicon metal, yellow phosphorus and other quotes to start work is also restricted. Therefore, the overall view of the downstream market starts low, inhibit graphite electrode market consumption.

Second, some of the raw material prices were lowered, but the impact on the graphite electrode market did not play an obvious role

Although the low sulfur petroleum coke has been adjusted downward in August, Jinxi refinery is currently executing 6800 yuan/ton. However, due to the long production cycle of graphite electrode, the cost side of the market impact on the current market can not have a certain impact for the time being. In addition, the field is currently mostly bought in the early raw materials at high prices, so the cost pressure on graphite electrode enterprises has not yet eased. In addition, the needle coke price is in a state of high oscillation, 3.97% lower than in July, and 31.14% higher than the price at the beginning of the year.

Although the recent graphite electrode raw material prices have been adjusted downward, but the rate of raw material price reduction is less than the graphite electrode price adjustment, the graphite electrode market loss state continues, and some of the graphite electrode produced by high-priced raw materials loss is more obvious. The graphite electrode market offer is slightly confusing, and the actual transaction has a price difference. According to the understanding of BCF, the actual transaction center of ultra-high power 450mm specification graphite electrode is low, individual low-priced resources to 18000 yuan/ton.

Third, graphite electrode enterprises have production cuts and conversions, limited supply side pressure increase

Affected by the current poor market demand of graphite electrode, in order to avoid the imbalance between supply and demand and maintain the relative stability of prices, graphite electrode enterprises have mostly cut production, shut down production, or shift the downstream demand, transferring part of the electrode capacity to negative electrode, producing graphite crucible, graphite carbon plate, etc.

With the increase of steel mill production reduction and the fluctuation of graphite electrode raw material price, graphite electrode enterprises are in a wait-and-see mood to maintain the production reduction, some graphite electrode enterprises have shut down the process of pressing and other processes, production to consume semi-finished products. At present, the downstream demand is not good, but the graphite electrode enterprises synchronous storage production reduction, transfer production, the overall supply side of the market pressure is limited, the market inventory accumulation of a small amount of mainly, most graphite electrode enterprises said inventory pressure is not big.

IV. Graphite electrode exports in July decreased compared with the same period last year

According to customs data, China's graphite electrode exports in July 2022 were 29,400 tons, an increase of 14% YoY and a decrease of 11% YoY; the total exports of graphite electrode in January-July 2022 were 208,100 tons, a decrease of 15.93% YoY. The main export countries/regions of graphite electrode in July 2022: Russia, Kazakhstan, South Korea.

Post-market forecast: Short-term downstream steel mill demand negative impact continues, in order to stabilize the market, graphite electrode enterprises continue to maintain production cuts in August, the market supply is expected to decline. Along with the reduction of graphite electrode enterprise inventory and social inventory, the supply side contraction or favorable graphite electrode after market. However, short-term look at the downstream demand needs time to improve, so it is expected that short-term graphite electrode prices or low stability wait-and-see operation, the high price of resources down 1000 yuan / ton.