Abstract Introduction: Graphite electrodes have increased by 232.6% year-to-date. The price increase has also changed the industry rules. As a result, the graphite electrodes are adjusted every quarter, and the quotation cycle has been shortened to one month. "Now the supply is so tight, the price...
Introduction: Graphite electrodes have increased by 232.6% year-to-date. The price increase has also changed the industry rules. As a result, the graphite electrodes are adjusted every quarter, and the quotation cycle has been shortened to one month.
"Now the supply is so tight, the price will definitely be higher, we are not selling now," a carbon industry person told the 21st Century Business Herald on July 11.
According to data from Baichuan Information, as of July 11, the graphite electrode has increased by 232.6% year-to-date, ranking first among the 305 industrial raw materials it tracks, and the increase in ultra-high power graphite electrodes is even more alarming.
"The price we expected before is that the ultra-high-power varieties will rise to 100,000 yuan per ton, but some products of some enterprises have already reported 100,000 yuan. At the beginning of the year, the mainstream transaction price of the market is still less than 20,000 yuan per ton." Song Juan, an analyst at Baichuan Information Carbon, said.
In the interview process of the 21st Century Business Herald, it was learned that the contradiction between supply and demand in Hebei and Jiangsu is obvious, and it is relatively difficult for dealers to get goods. Even the price increase has changed the industry rules, so the former graphite electrodes are mostly adjusted every quarter, and now the quotation cycle has been shortened to one month.
It is worth noting that the limited production and supply reduction brought by environmental protection and the replacement effect of the electric arc furnace brought by the cleaning of the intermediate frequency furnace are still difficult to change significantly in the second half of the year. Some people in the industry have not hesitated to assert that !"
Supply and demand "addition and subtraction" For graphite electrodes, it can be seen as an extension of the steel industry. The market demand for graphite electrodes is mainly due to the increased demand for electric arc furnaces by steel companies.
Unlike mainstream blast furnace steelmaking, the raw materials for intermediate frequency furnaces and electric arc furnaces come from scrap steel. However, the two are different. The intermediate frequency furnace cannot effectively control the composition and quality, so the quality of steelmaking is poor, and the electric arc furnace can solve the above problems.
Beginning at the end of 2016, the domestic medium-frequency furnace will be cleaned up centrally. As of June 30, in the first half of the year, more than 600 “strip steel†production enterprises were banned and shut down, involving a production capacity of about 120 million tons.
How big is the impact of this cleanup? In 2016, domestic crude steel production was 808 million tons. In other words, cleaning up the intermediate frequency furnace is equivalent to removing 15% of the output, and some institutions estimate the capacity of the intermediate frequency furnace to be more than 120 million tons.
“Our measured medium frequency furnace involves a production capacity of 171 million tonsâ€, Zhang Congcong, a researcher at Zhuo Chuang Information Steel, said that after the cleaning of the intermediate frequency furnace, the market has increased the expectation of the electric arc furnace as an alternative.
In the process of electric arc furnace steelmaking, it is necessary to use graphite electrodes and metal materials to generate arc high temperature to melt the charge. Although the specific amount of substitution is not yet estimated, some enterprises in East China have already been replaced.
"As far as I know, there are several private steel enterprises in Shandong and Jiangsu, and they are preparing or preparing for electric arc furnaces. However, there are not many enterprises using electric arc furnaces in Tangshan, mainly concentrated in East China," Zhang Congcong said.
This is related to the distribution characteristics of the intermediate frequency furnace. As a large steel province, the number of intermediate frequency furnaces in Hebei is not much, and the demand for replacement is not high.
It should be pointed out that it is not easy to switch from an intermediate frequency furnace to an electric arc furnace.
"This is a qualification that does not mean that you want to be able to go up. A company in Tangshan still said that he wants to switch to an electric arc furnace, but he has no qualifications," Zhang Congcong told reporters.
However, she also raised some concerns. "In the context of supply-side structural reforms, the future increase in electric arc furnaces will not be large, and there will be a cyclical problem. Wait until the release of capacity is at least a few months. There is still no such high profit and uncertainty."
On the other hand, the graphite electrode, which belongs to the highly polluting industry, is also facing great environmental pressure. The production enterprises in Hebei, Shandong and Henan provinces are mostly in a state of limited production.
"If there is no guarantee of ring, it will be banned. Enterprises with ring guarantees will have to undergo one round of environmental inspections. For example, Henan Linzhou has faced many inspections, which will inevitably affect the output of graphite electrodes." Song Juan think.
A person in the carbon industry in Beijing also told reporters that small manufacturers have closed a lot, especially Hebei inspection is very strict, "I am on the way to Henan now, they can be bought nearby, but now they are found Beijing company."
The end of the rally is to clean up the replacement demand brought by the intermediate frequency furnace, and on the other hand, the supply caused by environmental factors is weakened. Between the addition and subtraction, the joint increase of the graphite electrode was created.
Will the above factors change in the second half of the year, thus guiding the price to fall? As far as the current market is concerned, the pattern of tight supply has not changed.
“The inventory of graphite electrode enterprises is very low, basically it will not be given to traders. Even if traders can get the goods, they will not dare to pick up the goods in the face of such high prices.†Song Juan said that before the customers went to get the goods. It is a cash sale, and now all the money is placed first in the factory, and the production is rushed away.
Even so, it is difficult to ensure the supply of the graphite electrode. According to Song Juan, some graphite electrode companies can only guarantee 50% of the supply to downstream customers.
When the 21st Century Business Herald reporters consulted the traders in Jiangsu and Hebei, both of them indicated that the supply was tight. The company has no stock available for sale.
"It should be no problem to rise to October, and we are constantly raising the target price." Song Juan pointed out that the production of graphite electrode enterprises is already at full capacity, and the supply in the second half will not be much different from the current stage.
She expects that the demand for graphite electrodes will further increase in the second half of the year, mainly due to the high profits of the steel industry. “Recently, various manufacturers have generally reported that the purchases from steel mills have increased significantly.â€
Another variable comes from the cost side, which is the production of raw material needle coke from graphite electrodes.
Public reports show that Shanxi Hongte's recent coal-based needle coke has risen from 9,000 yuan / ton to 22,000 yuan / ton, before Jinzhou Petrochemical also raised the price of the company's oil system needle coke.
Compared with the graphite electrode, the needle coke rises relatively lagging, but as its price rises, it will also bring cost support to the graphite electrode.
The Everbright Securities Steel team pointed out that 1.05 tons of needle coke is required to produce 1 ton of ultra-high power graphite electrode, and 30% needle coke and 70% petroleum coke are required to produce 1 ton of high power graphite electrode.
It is worth noting that although the basic surface of the graphite electrode still supports its price increase, it is mainly based on the higher power graphite electrode used in steelmaking. If the steel market changes its face in the future, the graphite electrode will be difficult to maintain its strength.
In addition, the price of too fast rise also broke the original price relationship.
It is understood that in addition to 70% to 80% of consumption from the steel industry, there are also some graphite electrodes used in metal silicon, mold and other fields.
"The graphite electrode used in steelmaking is less than 20,000, and now it has risen to 60,000. We sold 20,000 before this, and now it has only risen to more than 30,000 points." The aforementioned carbon industry in Beijing said.
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