China’s flake and spherical graphite prices fall further as European flake market rises

Fastmarkets’ latest weekly price assessment for graphite flake 94% C, +80 mesh, fob China, was $1,100-1,120 per tonne on June 1, narrowing downward by $10 per tonne (0.45%) from the previous week.

On the same day, the price for graphite flake 94% C, +100 mesh, fob China, was assessed at $930-950 per tonne, down from $940-970 per tonne (1.57%) a week earlier.

Meanwhile, the weekly price assessment for graphite flake 94% C, -100 mesh, fob China, was $670-700 per tonne on Thursday, narrowing downward by $15 per tonne (1.08%) from the previous week.

Market sentiment remained bearish against the backdrop of sluggish demand in the downstream refractories and anode sectors.

The steelmaking sector has been under pressure in the past couple of months amid slowing exports, weak domestic consumption and shrinking profit margins for steelmakers in China, according to a producer of flake graphite in China.

“There are only sporadic inquiries these days. And even if there is a deal, it is only for a small volume,” a trader in China said. “It is difficult to find any large orders under the current circumstances.”

China’s steel industry has been experiencing a tough period, with narrowing profit margins and bearish demand.

The industry’s total profit fell by 99.4% year-on-year from January to April this year, according to data published by China’s National Bureau of Statistics.

Furthermore, the progressive depreciation of the Chinese yuan has created space for suppliers in China to cut their prices while maintaining their profit margins, according to market sources.

The yuan was trading at 7.120 yuan to $1 on June 1, down by 2.8% from the start of May, when it was 6.929 yuan to $1, according to currency website Oanda.com.

Elsewhere on the supply side, some producers have slowed or even temporarily halted their operations to keep prices from falling further, according to a second trader in China.

In Luobei, a major production hub of flake fines for spherical graphite products, some producers have resumed operations.

“Despite that, the supply of spot flake graphite has not increased greatly, given that some producers tend to use it for their own spherical graphite production while others just hold on to it because of the weak market conditions,” a second flake graphite trader in China said.

In Europe, some flake graphite prices rose following a long downward trend, in an indication that the market may have reached its bottom.

Fastmarkets’ weekly price assessment for graphite flake 94% C, +80 mesh (894), cif Europe, was $1,146-1,315 per tonne on June 1, up by $70-146 (9.62%) from $1,000-1,245 per tonne on May 25.

The price of graphite flake 94% C, +100 mesh (194), cif Europe, was stable at $975-1,145 per tonne in the same comparison.

Meanwhile, the weekly price assessment for graphite flake 94% C, -100 mesh (-194), cif Europe, was $650-745 per tonne on June 1, widening upward by $45 per tonne (3.33%) from $650-700 per tonne.

There were signs of some refractories producers returning to the market despite the low consumption rates of material by the steel sector.

“There has been a slowdown in the steel market, so we have not needed much material recently,” a consumer in Europe said. “We last bought in September and are only coming back to the market now.”

But some market participants doubted whether the market had ended its downward trend, which began in the third quarter of 2022.

On June 30 last year, Fastmarkets’ price assessments for 894, 194 and -194 materials on a CIF Europe basis were $1,535, $1,400 and $900 per tonne respectively.

“We really do not know if prices have bottomed out. It will depend on how demand evolves worldwide, and it will mainly depend on Chinese demand for spherical graphite,” a trader in Europe said. “Demand is weak here and customers are placing smaller orders more often, instead of big orders.”

The spherical graphite market has also been on a downward trend with ample supply, weaker-than-expected demand and strong competition from the synthetic sector.

Fastmarkets’ price assessment for graphite spherical 99.95% C, 15 microns, fob China, was $2,000-2,200 per tonne on June 1, narrowing downward by $100 per tonne from $2,000-2,300 per tonne on May 25.

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