Some Information About the Graphite Electrode Market in 2020

Dear Customers,

You will all be aware that the global graphite electrode market, especially the Chinese graphite electrode market, and the Steel industry in general has struggled through several consecutive months of crazy price increases and an extreme imbalance of supply and demand. It is my sincere expert opinion that the drastic market conditions experienced in 2017，2020 will continue in 2021.

The seemingly softening situation in the middle of 2020 didn’t continue, a few thousand tonnes of additional stock into the market did cause a short term price drop but the volume was soon absorbed by the market and the ongoing demand still far exceeded the supply. Since Oct 2020, a new round of price increases has started, and so far the price is double that of the lowest level on Oct, 2020 and if it continues will soon reach the highest level seen in 2021.

As a metallurgist who has been working in the steel industry for 17 years, I do understand the needs and confusion faced by the iron and steel enterprises. We are deeply feel it is our responsibility to give you some advice as follows:

1. No matter whether the price is higher or lower, you should procure graphite electrodes as the most important and top priority strategic energy material, and continue your own production planning under the assumption and premise that you will receive material supply and production capacity quotas from the electrode plants. If you procure at a high price level, it probably seems that you will suffer a loss but you will be assured of getting certified quality material supplied on time. If you procure at a low price level it seems that you get a great deal but you take the risk that you do not get material supply, or get non certified material or do not get the material on time.

2. You should be very cautious when choosing international and Chinese cooperation partners, in particular you must confirm over and over again whether they have the true ability to deliver the material, where they manufacture the material, what means they have to manufacture, and finally if their own plants are unable to deliver the material do they have other ways to solve the production and delivery problem.

3. No one can accurately predict and judge the future price tendency, because the situation in China is very special and it is hard to predict and make an accurate judgment. However, the one thing we know for sure is that Chinese graphite electrode production capacity is far from enough to satisfy the market demand. Currently the production capacity of the main carbon plants in China is almost fully committed for 2020, and most are preparing for customer’s orders in 2021-2022.

4. Even if you procure the graphite electrode at a very high price level, as long as you get the material in line with the contract requirements and get the material on time, we will say you did a very good job and there is no ground for blame; alternatively if you procure the graphite electrode at a very low price level, sometimes it turns out that you got good luck, but at other times you will not get the material, or get a guaranteed delivery time and quality.

5. The only certainty is the uncertainty, production uncertainty and supply unavailability, unsteady prices both up & down.

6. Based on all the available data, it indicates that global graphite electrode supply will continue to be in short and tight supply, especially in China.

7. To make sure you can get our supply quantity and production capacity quotas in time, the offer validity is one day, and we need to renegotiate the price and quantities after the offer has expired.

8. We will divide all our customers according to the cooperation time, payment terms, price, order quantity and partnership closeness, then arrange the shipment.