If production restrictions, rising costs, and no profit are the masterminds behind the price increase of graphite electrodes after the cycle bottoms out, then the transformation of the steel industry has opened up imaginative space for the future price increase of high-end graphite electrodes.
At present, about 90% of the domestic crude steel production comes from blast furnace steelmaking (coke), which has a high carbon emissions. With the requirements of the country for the transformation and upgrading of steel production capacity, energy conservation and carbon reduction in recent years, some steel manufacturers have shifted from blast furnaces to electric arc furnaces for steelmaking. The relevant policies introduced last year also pointed out that the proportion of electric arc furnace steel production to the total crude steel production should be increased to over 15%, striving to reach 20%. As mentioned earlier, graphite electrodes are very important for electric arc furnaces, which indirectly improves the quality requirements of graphite electrodes.
Improving the proportion of electric arc furnace steel is not a groundless idea. Five years ago, the proportion of electric arc furnace steelmaking in the total crude steel production in the world had reached 25.2%, with the United States and the 27 EU countries accounting for 62.7% and 39.4% respectively. There is still a lot of room for progress in this area in our country, which has boosted the demand for graphite electrodes.
So it can be estimated that if the electric arc furnace steel production accounts for about 20% of the total crude steel production by 2025, and the crude steel production is calculated at 800 million tons/year, the demand for graphite electrodes in China in 2025 will be approximately 750000 tons. Frost Sullivan predicts that there is still some room for improvement in graphite electrodes at least in the fourth quarter of this year.
It can be said that graphite electrodes rise rapidly thanks to the electric arc furnace belt.
4、 Summary
Finally, to summarize, graphite electrodes have strong periodic properties and a relatively single application scenario, which are greatly influenced by downstream steel industries. After experiencing an upward cycle from 2017 to 2019, it hit a bottom last year. This year, under the combination of production restrictions, low gross profit, and high costs, the price of graphite electrodes has bottomed out and rebounded, and the operating rate has continued to rise.
In the future, with the green and low-carbon transformation requirements of the steel industry, electric arc furnace steel will become an important catalyst for driving up the demand for graphite electrodes. However, transformation and upgrading will inevitably be a long process. The price of graphite electrodes may soar, but it may not be that simple.
Post time: 3月-20-2024
