At the beginning of 2017, the average price of 500mm per ton of graphite electrode was only RMB 129,000/ton, more than ten times higher. Analysts pointed out that the tide was far from over. The two characteristics of graphite electrode have been determined, and the price increase basically will be continued.
1. Supply end : long production cycle
The production cycle of graphite electrode needs to be three months and can not stop in the middle. The current heating season has a significant impact on graphite electrode enterprises. In December, many carbon factories in Hebei province have stopped production and limited production and lost a lot of capacity. At present, most of the graphite electrode manufacturers in Henan and Hebei are still in the shutdown state. According to the agency, capacity expansion is expected to be difficult before the end of the heating season on March 15 next year; New capacity is expected to increase capacity of more than 100,000 tons of graphite electrode in June next year. Therefore, the short - term view of graphite electrodes will have a greater chance of maintaining the market in the first half.
2.Demand end: the development of electric furnace steel is the trend of the times.
Electric furnace steel is a big consumer of graphite electrode consumption, and the 70% demand of graphite electrode comes from electric furnace steel. And the fastest way to expand capacity is on the furnace steel making.
On the other hand, the state also expressed support for the development of electric furnace steel industry.
Luo Tiejun, inspector of the raw material industry department of the Ministry of Industry and Information Technology, pointed out that the state is advocating enterprises in the "226" cities to transfer steel production capacity to the southwest, northwest and southeast coastal areas in the form of electric furnace steel.
A few days ago, the chairman admitted that the next two years China's new production capacity of electric furnace steel can reach 80 million tons.