Demand patterns may shift with EU anti-dumping duties on Chinese graphite electrodes

Definitive anti-dumping duties imposed by the European Commission (EC) on China-origin graphite electrodes could lead to a shift in patterns of demand. But the outlook will probably remain uncertain until the final duties are decided in April this year, sources said

In January this year, the EC set definitive anti-dumping duties in the range of 25.5-74.9% on imports of certain graphite electrodes originating in China, subject to comments from all parties concerned.

The rate of duty applies to a percentage of the cost, insurance and freight (cif) price of material at the EU frontier, duty unpaid, and varies depending on the producer.

In addition, the Commission decided not to impose the duty on graphite electrodes with a nominal diameter of 350mm or less because of the low supply of such electrodes, which account for less than 1% of EU production, according to an official report.

The definitive anti-dumping duty was imposed following an earlier investigation and provisional duties imposed last March.

Participants in the graphite electrodes market now believed it increasing likely that demand would shift to sources on which lower duties were imposed.

Market participants said that some buyers in Europe have already switched their suppliers. Graphite electrodes consultant GES, for example, has become the exclusive distributor for Liaoning Dantan Technology Group, GES analyst Benjamin Sarkoezy told Fastmarkets. Liaoning Dantan was subject to the lowest dumping margin of 25.5%.

“Some suppliers from China have abandoned the European market entirely because they are no longer competitive,” Sarkoezy said.

And consumers from the UK, Turkey and other non-EU states have been given a competitive advantage because their imports will not be subject to the duty, sources said.

In addition, suppliers in China believed that while the anti-dumping duties will not affect fob China prices, there would be an immediate effect on cif Europe prices, and that this would lead to market share contraction in Europe, according to one producer in China.

“While, in the short term, China might retain its advantage regarding small diameters, due to the supply concentration, supplier-switching could be possible in the long term,” a second graphite electrode producer in China said.

In the calendar year 2020, China’s exports to the EU were around 43,113 tonnes, excluding smaller graphite electrodes, according to an official report. These held about 33.8% of local market share in December 2020, about one-and-a-half times more than a year earlier.

Factors of uncertainty

Despite the definitive anti-dumping duty, some market participants were saying that the outlook for exports to the EU remained unclear.

The final duty would still be subject to comments from interested parties, so anything is possible before the final duties are published in mid-April, a third graphite electrode producer in China said.

“If the [final] duties remain unchanged [and are the same as the definitive duties], market share in the region is expected to decline,” the same source added. “You should also consider the continuing anti-subsidy investigation on graphite electrodes from China.”

In October 2021, Graphite Cova GmbH, Showa Denko Carbon Europe GmbH and Tokai Erft Carbon GmbH lodged a complaint alleging unfair subsidies of imports of graphite electrodes originating in China, saying that these have caused material injury to EU suppliers of similar products. An official investigation was begun on November 18, 2021.

Meanwhile, there have been calls from some market participants in both the EU and China for the anti-dumping exclusion floor-level to be raised because there are limited options for producers within the EU to make these products.

“People might want the floor be raised to a nominal diameter of 500mm. It’s difficult to [predict] what will be decided in April’s final report,” a fourth producer in China said.

Fastmarkets’ latest price assessment for graphite electrodes, high power, fob China, was $3,360-3,470 per tonne on Wednesday February 16, up by 11.24% from the previous assessment on rising costs for needle coke.

On the same day, the price for graphite electrodes, ultra-high power (UHP), fob China, was assessed at $3,620-3,950 per tonne, up by 2.3% from the previous assessment at $3,460-3,940 per tonne.

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