china types of graphite electrodes
china types of graphite electrodes Topic 2: When and where is the sky when prices are rising to the top of the sky?
China types of graphite electrodes Topic 2: The price is accelerating to the nine heavens, when and where will the price rise?
One of the topics of china types of graphite electrodes: Profits have gone to the sky, why is the capacity utilization rate still only 40%?
The influential public account of the national steel industry chain “Not only steel goods” partner, Everbright Securities Steel Carbon Brother Wang Zhaohua team has taken the lead in the bottom of the market since the beginning of April with high frequency and strong logic recommendation China types of graphite electrodes plate, organized/written 28 China types of graphite electrodes related reports/research/meetings/minutes, 3 true in-depth reports, and more than 200 related daily newspapers/information, forming an industry-finance group of 490 people.
Take the ultra-high power price of china types of graphite electrodes as an example. It was 14,800 yuan/ton in early January, 3250 yuan/ton in January-March, 7750 yuan/ton in April, yuan/ton in May, and June The increase was RMB 70,000/ton on June 30, and the increase was 375% within six months.
Here we especially need to thank the 12 friends in the industry who accepted our telephone survey in mid-May. At the critical time when the market was very worried about the resumption of production, we once again made an accurate judgment “china types of graphite electrodes A survey of 12 companies in the industry chain: April and May have significantly consumed the previous inventory, and the days of tighter supply and demand will soon come.”
In the current china types of graphite electrodes industry, the most concerned question is: when and where will the price increase stop? Will there be a crash similar to 2008 after reaching the top? With the help of Wang Zhaohua’s team from China Everbright Securities, we might as well analyze as follows:
1. When will the price increase be closed: 10% probability will be until the end of September, 70% will be in March next year, and 19% will be in the middle of next year
1. The 10% probability will rise to mid-September
(1) A slight increase in supply will be at least at the end of September
From the perspective of supply, the price/profit of china types of graphite electrodes has risen significantly since early April, and the production cycle of china types of graphite electrodes is 4.5-5 months, that is to say, even for china types The manufacturers of graphite electrodes have started to increase horsepower production since the beginning of the boom, and the output will take until mid-August to September.
However, taking into account the company’s decision-making speed, capital status, procurement of raw materials, etc., we judge that the slight increase in output will be at least after the end of September.
According to the China Business Network announcement, incomplete statistics show that the output of China’s china types of graphite electrodes from January to April 2017 was 175,500 tons, a growth rate of 17% compared to the same period last year; the output of China’s types of graphite electrodes from January to May was 23.4 10,000 tons, a growth rate of 14% compared with the same period last year.
(2) From the perspective of demand, the economic benefits of electric furnace steel relative to converter steel may be flat by the end of September
55% of the demand for china types of graphite electrodes is used for electric furnace steel, so the demand mainly depends on the output of electric furnace steel. The output of electric furnace steel depends on three aspects:
(A) National policy;
(C) Relative to blast furnace-converter steel profit.
First look at the national policy. On June 29, the influential number of the national steel industry chain published an article “china types of graphite electrodes, and the industry welcomes major benefits: illegal electric furnace steel production capacity is expected to be legalized through market purchase capacity indicators. Currently 60 The market price of the production capacity per ton of electric furnace exceeds 100 million yuan”. The annual production capacity of 60 tons of electric furnace is estimated at 500,000 tons. The legalized annual rate is only 200 yuan/ton, which is far lower than the current profit of electric furnace steel. Therefore, this policy was introduced. , Has brought very good economic prospects to the production capacity of illegal electric furnaces.
Next, let’s look at profit. If there is no profit, electric furnace steel can be shut down at any time. At present and in the next year, electric furnace steel still has a high probability of profitability.
What is currently changing is the profit of electric furnace steel relative to blast furnace-converter steel: 700 yuan/ton higher in mid-April and 220 yuan/ton higher at the end of June (this does not take into account the changes in the price of china types of graphite electrodes so far. As well as tax rebates, but the two can almost be offset), due to the recent surge in iron ore and coke prices, we expect that the two will be flat again around October.
2. The 70% probability will rise to mid-March 2018
Mainly based on two reasons:
(1) During the “heating season”, manufacturers of types of graphite electrodes in North China may face more severe production cuts;
(2) The supply of raw material needle coke is already in short supply.
According to a report on the website of the Ministry of Environmental Protection on March 23, six local governments including the Ministry of Environmental Protection, the Development and Reform Commission, the Ministry of Finance, the National Energy Administration and Beijing jointly issued the “Beijing-Tianjin-Hebei and Surrounding Areas 2017 Air Pollution Prevention and Control Work Plan”. It is proposed that all local carbon companies that fail to meet the special emission limit during the heating season will stop production, and if the special emission limit is reached, the production will be limited to more than 50%, based on the production line.
North China (including Shandong) is the largest producer of china types of graphite electrodes in the country, accounting for about 30% of the output; taking Beijing as an example, the heating season is generally November 15-March 15. If the heating season policy is implemented, we judge that the shutdown of China types of graphite electrodes manufacturers in North China may reach 30%-100%; the overall impact on the national output of China types of graphite electrodes is more than 10%-15%, which is already in short supply. The market will have a greater impact.
In addition, it is necessary to consider the supply of needle coke, an important raw material for high-power and ultra-high power china types of graphite electrodes. Half of the needle coke is used for china types of graphite electrodes, and half is used for the negative electrode material of new energy lithium batteries. The high supply of coke prices is tight, and there is no price available, which will restrict the release of china types of graphite electrodes.
3. The 19% probability will rise to mid-2018
At present, the net profit of china types of graphite electrodes is as high as 47%. Under this background, there will definitely be new production capacity secretly, but the capacity construction cycle of the whole process is 2-3 years (calculated from the beginning of civil construction), and the investment is 10,000 tons. The amount is up to 100 million yuan; but actual production is often carried out through mutual cooperation and outsourcing. Production capacity recovery is expected to be faster. We believe that some processes will start construction outside of North China, and will also be at some point in 2018. Release slowly. We estimate that this point in time may be in the middle of 2018.
As for why it will not appear in North China, please refer to “China Types of Graphite Electrodes, one of the topics: Profits have been skyrocketed, why is the capacity utilization rate still only 40%?”.
4. 1% of variables: policies and others
In many cases, people are not as good as heaven. For the market, we are in awe. The future variables of china types of graphite electrodes also include the economic situation and policies at home and abroad.
Of course, we are almost 99.9% sure that China types of graphite electrodes will not appear similar to 2008. After all, the output of electric furnace steel has really risen, and the depreciation cycle of scrap steel is about to come. In the next 2-3 years, even if the price of china types of graphite electrodes is adjusted, it will still be at a relatively high position and a relatively large profit.
2. Where to stop: When the profit of electric furnace steel relative to converter steel is flat, it is necessary to be cautious
Of course, the price increase of any product will not be unlimited, and the same is true for china types of graphite electrodes. As mentioned above, electric furnace steel is the largest downstream of china types of graphite electrodes. If the profit of electric furnace steel is lower than that of converter steel for a long time, some steel mills that have both electric furnace steel and converter steel will choose to use electric furnace steel less; if electric furnace steel appears If it loses money, the manufacturer will also choose to stop production.
At present, according to Tangshan’s calculation, electric furnace steel still has a net profit of 217 yuan/ton more than converter steel. Based on the calculation of 3KG China types of graphite electrodes per ton of steel, the price of china types of graphite electrodes rises by 70,000 yuan, which is equivalent to covering it. The net profit difference of 217 yuan. But here is to ignore the factor of the price difference between scrap steel and pig iron (the current price of iron ore and coke has increased significantly, which adds a margin of safety to the price of electrodes).
It is conservatively estimated that it is not difficult for the price of china types of graphite electrodes to increase by 15,000 yuan/ton; the neutral and optimistic forecast is expected to increase by more than 30,000 yuan.
The above is only for giving a good idea, and does not constitute any investment advice, operate at your own risk accordingly! What’s wrong, you are welcome to criticize and correct me, thank you! Originality is not easy, if you think it is helpful to you, please don’t hesitate to forward and like it in your circle of friends!