First, the price trend analysis
In the first quarter of 2021, China’s graphite electrode price trend is strong, mainly benefiting from the high raw material price, promoting the continuous rise of graphite electrode price, enterprise production pressure, the market price willingness is strong, and the supply of small and medium-sized specification resources is tight, which benefits the overall rise of graphite electrode price.
China’s graphite electrode market in the second quarter after a rapid upward stability.The rapid rise is mainly reflected in April, the steel mills began a new round of bidding, the downstream electric furnace steel mills with high profit and high start, good graphite electrode demand.On the other hand, Inner Mongolia has dual energy consumption, the supply of graphite is tight, and the supply of graphite electrodes is reduced, increasing the power of the price of graphite electrodes.However, from May to June, raw material petroleum coke prices are negative, combined with downstream suppression, graphite electrode prices rise weak.
In the third quarter, the price of graphite electrode in China was stable and weak, and the traditional demand off-season, coupled with the strong supply side, the mismatch between supply and demand led to the decline of graphite electrode prices.In terms of raw materials, the price continues to rise, and under the pressure of cost, the price of graphite electrode is strong. However, some graphite electrode enterprises quickly clear warehouses and recover funds, resulting leading to the decline of graphite electrode prices at the beginning and end of the third quarter.
In the fourth quarter, due to the influence of domestic production and electricity restriction, domestic raw material prices continued to rise, with low sulfur oil coke, asphalt rose more significantly, high electricity price, Inner Mongolia and other places of graphite supply is tight and high price, the cost promoted the price of graphite electrodes in China.However, although the production and power limit have affected the graphite electrode enterprises, but the downstream electric furnace steel started low, low profit, but also caused the decline of market demand, supply and demand are weak, the price reversal is higher.There is no demand, only cost drive, and price rises lack stable support, so short-term price pullbacks have become an occasional normal phenomenon.
In general, the overall shock of China’s graphite electrode market in 2021 is strong. On the one hand, raw material prices will promote the rise and fall of graphite electrode cost, and on the other hand, the start and profit of electric furnace steel mills have effectively led to the rise and fall of graphite electrode price.The rise and fall of the graphite electrode market in 2021 put aside the impact of supply, featuring the raw material cost and downstream demand, explaining the price fluctuations of graphite electrodes throughout the whole year.
II. Cost and profit analysis
From the ultra high power graphite electrode cost analysis, in Jiangsu ultra high power graphite electrode 500, for example, the second quarter May profit reached 5229 yuan / ton, third September lowest-1008 yuan / ton, from the perspective of 2021 market, more than power graphite electrode profit most period maintain positive development, compared with 2018-2020, China’s graphite electrode industry basically entered a benign development stage.
According to Fangda Carbon’s financial results in the first three quarters of 2021, the profit growth rate was 71.91% in the first quarter, 205.38% in the second quarter, and 83.85% in the third quarter. The second quarter of 2021 is also a period of rapid profit growth.
Third, demand analysis
(1) Foreign aspects
In 2021, China’s total graphite electrode exports are expected to reach 400,000 tons, up 19.55% year on year, surpassing the 2020 level.From January to November exports data, exports have reached 391,200 tons.In 2021, it is mainly affected by the stable factors of the domestic epidemic, and all the work is carried out more organized, increasing the number of exports.
In 2021 China’s graphite electrode exports overall trend is strong, from the outbreak of the global economic market, compared with 2021 and 2019 market, showed a strong contrast, 2019 China’s graphite electrode exports mainly concentrated between March-September, March-July graphite electrode exports increasing, March-September exports occupy 66.84% of the annual exports, and in 2021, exports stable and weak, March and November in addition to rapid growth, the overall exports each quarter is roughly equivalent.
(2) Domestic demand
Relevant institutions released: in 2021, China’s crude steel output was 1.040 billion tons, down 2. 3% year on year, China’s graphite electrode demand was 607,400 tons, and in 2021, China’s graphite electrode output is expected to exceed 1.2 million tons.
From the current domestic and foreign demand, China’s graphite electrodes are in a state of overcapacity.It also indirectly caused the current domestic graphite electrode price is difficult to return to the era of high profit.
Domestic graphite electrode market outlook in 2022
Production: during January-February, the mainstream graphite electrode enterprises maintain normal production state, but as the winter atmospheric environmental protection management approaching, into January, Inner Mongolia, Shanxi, Hebei, Henan, Shandong, Liaoning and other places will face production maintenance, market starts down and maintain low, after March graphite electrode market overall spot resource supply is tight.
Inventory, in the fourth quarter of 2021, market demand is far from expected, foreign market demand by outbreak again, the New Year inventory reserve is not strong, graphite electrode enterprise inventory accumulation, although some enterprises to accelerate capital reduction sales, but downstream demand recovery is not obvious, and accelerated the market malicious competition, inventory is not high, but the imagination is more obvious.
In terms of demand, China’s graphite electrode market demand surface is mainly reflected in the steel market, export market and metal and silicon market.Iron and steel market: from January to February, the steel market started low, the mainstream steel plant graphite electrode has the early stock inventory, the electric furnace steel plant started or general, in the short term, the overall procurement willingness of steel mills is not strong, in the short term, the plain downstream demand has little impact on the graphite electrode market.Silicon market: The silicon industry has not passed the dry period. In the short term, the metal silicon industry continues to start weak before the year, and the demand for graphite electrodes continues to be a stable and weak trend before the year.
In terms of export, ship freight remains high, and professional understanding is expected that freight rates will continue to run high for a period of time, which may ease in 2022.In addition, the global seaport congestion has been around 2021. In Europe and East Asia, for example, an average delay of 18 days, 20% more than before, resulting in higher shipping costs.The EU has conducted an anti-dumping investigation of Chinese graphite electrodes.To China
Post time: Jan-10-2022