- China has an advantage in production capacity and leading enterprises have strong bargaining power
The middle reaches of the graphite electrode industry are graphite electrode production enterprises, with private enterprises as the main participants. China’s graphite electrode production accounts for about 50% of the global graphite electrode production. As a leading enterprise in the Chinese graphite electrode industry, Fangda Carbon’s graphite electrode market share in China exceeds 20%, and its graphite electrode production capacity ranks third in the world.
In the ultra-high power graphite electrode market, due to the high technical requirements for ultra-high power graphite electrodes, industry leading enterprises with corresponding technical strength have released production capacity, and the top four enterprises account for more than 80% of the ultra-high power product market share. Large graphite electrode enterprises in the midstream have strong bargaining power over the downstream steelmaking industry, requiring downstream customers to pay upon delivery without providing payment terms.
- Small businesses gradually clear their production capacity
Although the production capacity of the graphite electrode industry is growing rapidly, most of the production capacity is mainly small-scale, making it difficult to meet the environmental protection requirements of the industry. The China Carbon Industry Association implemented air pollution emission standards for the carbon industry in 2019, and in 2021, in accordance with the requirements of the Ministry of Industry and Information Technology, formulated and issued the “Calculation Method for Carbon Dioxide Emissions from Carbon Product Manufacturing”. The environmental protection requirements of the carbon industry have gradually increased. Due to the decline in graphite electrode prices since 2019, small businesses have gradually withdrawn from the market due to high costs and weak environmental protection. Since 2020, the effective production capacity of the industry has gradually fallen from around 2.1 million tons to around 1.2 million tons. Considering that some enterprises only have graphite production lines and do not have the production capacity for graphite electrodes, the actual effective production capacity of the graphite electrode industry is less than 1.2 million tons. The industry has returned from oversupply to supply-demand balance: Since mid-2022, despite losses in electric furnace steelmaking and a slight decrease in demand for graphite electrodes, the price of graphite electrodes has remained stable.
- Industry barriers are gradually rising, and the future competitive landscape of the industry will gradually improve.
Against the backdrop of environmental tightening, on the one hand, the production energy consumption of graphite electrodes is relatively high, making it difficult for enterprises to obtain energy ratings. On the other hand, new enterprises will face a gradually increasing operating environment with environmental costs, making it more difficult for them to enter the graphite electrode industry. In addition, downstream demand for the stability of high-power and ultra-high power graphite electrodes is high, and the production technology of high-end graphite electrodes is difficult. Enterprises in the industry have a first mover advantage, and the difficulty of catching up with new entrants is gradually increasing. Guotai Junan judges that the entry barriers to the graphite electrode industry are gradually rising, indicating the future of the industry
Post time: 3月-20-2024
