Graphite electrode prices in China edged upward on rising needle coke costs

China’s graphite electrode prices ticked up in the fortnight to Wednesday February 16 on needle coke prices that have risen continuously over the past couple of months, as well as high graphitization costs due to restrained capacity with competition from the anode sector, market sources have said

Fastmarkets’ price assessment for graphite electrodes, high power (HP), fob China, was $3,360-3,470 per tonne on February 16, up by 11.24% from the previous assessment at $2,990-3,150 per tonne.

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.

The price spreads for both HP and UHP material were tightening upward with the majority of inputs within the current ranges, showing the unanimous bullishness between sellers and buyers.

There was an expectation that prices would rise further in response to increasing costs for needle coke, the main feedstock for graphite electrodes, and electricity costs, according to market participants.

“Some producers are not even offering at the moment because they are waiting for higher prices to be [viable],” a distributor said. “It is a very turbulent market, but the expectation is that prices will rise further.”

Consumers were coming to the market and finding limited availability and higher prices, according to sources.

Needle coke prices have been rising progressively for the past couple of months, driven by a supply interruption for needle coke produced domestically in the north of China because of environmental checks. And the latest price quoted for imported needle coke was said to be around $1,800 per tonne, according to a producer in China.

The price of imported coal-based needle coke was said to be around $1,500 per tonne at the beginning of this year, up by 20% in the space of one-and-a-half months, sources said.

Aside from the feedstock pressure, there was growing competition from anode production in terms of graphitization capacity.

“While operations have yet to recover from either environmental regulation or China’s lunar new year holiday,” a second producer in China said, “production costs are staying high [because of] increasing costs for feedstock and graphitization, driven up by anode expansion, which also uses needle coke and petrol coke as raw material.”

And competition has developed between electrode producers for the steel and anode markets over limited graphitization facilities, with sources saying that this has seen the electrode producers squeezed out on occasion.

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