uhp 500 mm graphite electrodes
China’s uhp 500 mm graphite electrodes face oversupply
Ulan Chabu uhp 500 mm graphite electrodes company learned that:
1. Market review In 2018, the supply of uhp 500 mm graphite electrodes in China continued to increase, and the growth rate exceeded that in 2017. At that time, due to the surge in demand and news about the global supply shortage, the output increased significantly. Due to the commissioning of the new plant, a new round of production peaks may occur this year and next. According to statistics, the output of China’s uhp 500 mm graphite electrodes in 2018 increased by 18.5% to 700,000 tons. Prior to this, the increase in 2017 was 15.7%. The recent growth is mainly due to strong demand from China’s steel industry, with approximately 170 electric arc furnaces newly put into operation. According to relevant data, the proportion of China’s domestic electric furnace steel in total crude steel has increased from 7.3% in 2016 to 12% in 2018. This means that China’s electric furnace steel production (111 million tons) almost doubled in 2018. In 2018, external demand is also growing steadily. China’s export volume of uhp 500 mm graphite electrodes increased by 21% to 287,400 tons.
Southeast Asia and the Middle East are still the main destinations for China’s uhp 500 mm graphite electrodes export. The prospects for further growth in consumption of uhp 500 mm graphite electrodes remain bright. According to Goldman Sachs estimates, by 2025, China’s electric furnace steel will account for 19% of the total crude steel. This good prospect is expected to encourage more and more uhp 500 mm graphite electrodes manufacturers to expand their existing production capacity and build New plant. In 2010, many new projects will be put into production.
Among them, Baosteel Group and Fangda Carbon Group’s joint venture-Baofang Carbon Material Technology Company project has attracted much attention. In the next few years, China’s uhp 500 mm graphite electrodes will be manufactured in Inner Mongolia. Due to its preferential investment policies and low electricity prices, Inner Mongolia has become an attractive location for plant construction in China. In the middle of this year, Inner Mongolia will have a production capacity of 300,000 tuhp 500 mm graphite electrodes and will build another 100,000 tons of production capacity in 2020. In 2018, other regions of China originally planned to build 220,000 tuhp 500 mm graphite electrodes capacity, but most of them have been postponed to 2019. The main Baoshan Qamdo uhp 500 mm graphite electrodes project (40,000 tons production capacity) was launched in Yunnan in February this year.
2. Market Outlook In 2018, the average capacity utilization rate of China’s uhp 500 mm graphite electrodes will be less than 60%. The aforementioned expansion plan will inevitably push up market prices in the next two years and reduce producer profits. Most market participants believe that the market will show a downward trend in the second half of this year, and this trend will form momentum in 2020. The factor preventing the plummeting price of uhp 500 mm graphite electrodes is the insufficient global supply of needle coke. Needle coke is the main raw material for the production of uhp 500 mm graphite electrodes. In the past, China mainly relied on imports. It reached 488,000 tons, of which domestic needle coke production and imports grew slowly.
In addition, China is currently building a number of needle coke capacity expansion projects. Baosteel, Maanshan Iron & Steel, Fangda Carbon and other companies are investing in new plants to improve the quality of needle coke. A manufacturer of uhp 500 mm graphite electrodes stated that if customers have strict requirements, they will buy and use imported needle coke; if the customer’s furnace does not require high-standard materials, they can use domestic needle coke to optimize their competitiveness. Most manufacturers of uhp 500 mm graphite electrodes are convinced that the market share of domestic needle coke will continue to grow substantially in the next few months, and imports will also increase. The shortage of needle coke supply, coupled with the rapid expansion of the production capacity of uhp 500 mm graphite electrodes, will inevitably drop in the next few years.
Sun Qing of the China Carbon Industry Association (CCIA) stated in an industry conference that China’s annual production capacity of uhp 500 mm graphite electrodes is expected to reach 1.5 million tons in 2020, compared with 900,000 tons in 2017, which will seriously exceed less than 80 tons in 2020. Ten thousand tons of annual demand. After reaching its peak in early 2018, the price of uhp 500 mm graphite electrodes has fallen by more than half so far. However, the current quotation is still much higher than the level before 2017. In the next ten years, the bubble will disappear after all new projects of uhp 500 mm graphite electrodes and needle coke are put into production.