Since 2018, graphite electrode production capacity in China has increased significantly. According to the data of Baichuan Yingfu, the national production capacity was 1.167 million tons in 2016, with the capacity utilization rate as low as 43.63%. In 2017, China’s graphite electrode production capacity reached the minimum of 1.095 million tons, and then with the improvement of industry prosperity, the production capacity will continue to be put in 2021. China’s graphite electrode production capacity was 1.759 million tons, up 61% from 2017. In 2021, industry capacity utilization is 53%. In 2018, the highest capacity utilization rate of graphite electrode industry reached 61.68%, then continued to decline. Capacity utilization in 2021 is expected to be 53%. Graphite electrode industry capacity is mainly distributed in north China and northeast China. In 2021, the graphite electrode production capacity in North and northeast China will account for more than 60%. From 2017 to 2021, the production capacity of “2+26″ urban graphite electrode will be stable at 400,000 to 460,000 tons.
From 2022 to 2023, new graphite electrode capacity will be less. In 2022, the capacity is expected to be 120,000 tons, and in 2023, the new graphite electrode capacity is expected to be 270,000 tons. Whether this part of the production capacity can be put into operation in the future still depends on the profitability of the graphite electrode market and the government’s supervision of the high energy consumption industry, there is some uncertainty.
Graphite electrode belongs to high energy consumption, high carbon emission industry. The carbon emission per ton of graphite electrode is 4.48 tons, which is only inferior to silicon metal and electrolytic aluminum. Based on the carbon price of 58 yuan/ton on January 10, 2022, the carbon emission cost accounts for 1.4% of the price of high power graphite electrode. The power consumption per ton of graphite electrode is 6000 KWH. If the electric price is calculated at 0.5 yuan/KWH, the electric cost accounts for 16% of the price of graphite electrode.
Under the background of “dual control” of energy consumption, the operation rate of the downstream eAF steel with graphite electrode is significantly inhibited. Since June 2021, the operating rate of 71 eAF steel enterprises has been at the lowest level in nearly three years, and the graphite electrode demand has been significantly suppressed.
The increase of overseas graphite electrode output and supply and demand gap is mainly for ultra-high power graphite electrode. According to Frost & Sullivan data, the output of graphite electrode in other countries in the world decreased from 804,900 tons in 2014 to 713,100 tons in 2019, of which the output of ultra-high power graphite electrode accounted for about 90%. Since 2017, the increase of graphite electrode supply and demand gap in overseas countries mainly comes from ultra-high power graphite electrode, which is caused by the sharp growth of overseas electric furnace crude steel output from 2017 to 2018. In 2020, overseas production of electric furnace steel declined due to epidemic factors. In 2019, China’s net export of graphite electrode reached 396,300 tons. In 2020, affected by the epidemic, overseas electric furnace steel production dropped significantly to 396 million tons, down 4.39% year on year, and China’s net export of graphite electrode dropped to 333,900 tons, down 15.76% year on year.
Post time: Feb-23-2022