As crucial components in various industries, graphite electrodes play a pivotal role in powering essential processes. In this article, we delve into the dynamic landscape of the graphite electrode industry, analyzing the emerging trends that will shape its trajectory from 2022 to 2023. From technological advancements to shifting market demands, we uncover the forces driving the evolution of graphite electrodes. Join us as we explore the exciting developments and gain valuable insights into the future of this vital industry.
According to the 2022 report of Fangda Carbon: Fangda’s turnover increased by 16% last year, while its net profit decreased by 17.54%, happened a situation of increasing revenue but not increasing profits. Industry insiders predict that the supply and demand and cost pressures of the graphite electrode industry this year will be better than in 2022, but the industry is still in a state of overcapacity.
In 2022, the cost of the graphite electrode industry rose and the demand was weaken, revenues of leading companies increased but no profit.
In 2022, the graphite electrode industry was affected by the dual pressures of cost and supply-demand relationship, and the industry leaders will not be spared.
The China Carbon Industry Association
stated that the overall carbon industry is a growth trend in 2022. Among all subdivisions, only the graphite electrode industry declined. The national output of graphite electrodes is about 720,000 tons, a year-on-year decrease of 6.58%. The main raw material of graphite electrode CPC, the average price is 4476 yuan/ton, an increase of more than 80% compared with the same period in 2021, which puts great pressure on the cost of the industry.
Compared with rising costs, insufficient downstream demand has a more profound impact on the industry. According to data from China Carbon Network, the overall operating rate of the graphite electrode industry in 2022 is only 42%, and the profitability of the industry has dropped significantly. The competition pressure of small and medium-sized enterprises is even greater, some enterprises are forced to stop production or transform.
In 2023, the pressure on raw materials and demand will weaken, and the development of the industry may recover
Since December 2022, 15 provinces have successively issued documents to vigorously promote the transformation of steel production from long processes to short processes, improve the recycling level of scrap steel, and accelerate the construction of electric furnace projects and the adjustment of blast furnaces. In the first quarter of 2023, the downstream market of graphite electrodes recover, and the demand is expected to be better than 2022. Mysteel research shows that as of March 2, the average operating rate of 87 EAF steel mills across the country reached 68.59%.
On the other hand, the price of needle coke also loosened. According to Choice data, the price of calcined petroleum coke has dropped from last year’s high of 13,500 yuan/ton to the current 10,500 yuan/ton. The cost of HP and UHP graphite electrodes began to decline. Due to the withdrawal of government subsidies for new energy vehicles, the demand for high-energy batteries has declined. Some battery and anode material companies have reduced the purchase of needle coke and turned to cheap petroleum coke as raw material. The supply and demand structure has changed, and the cost of graphite electrodes will continue to decline.
With the change of market demand, the pressure of the industrial chain has shifted from the downstream graphite electrode to the needle coke industry.
