Metallurgy may be short of graphite electrodes

According to Platts, in the near future, the steel industry may face a shortage of graphite electrodes used in electric arc furnaces and ladle furnaces. In fact, this absence could hit the entire metallurgical sector and beyond.

Platts reports that China's electrode exports will be halved this year, from 200,000 tonnes to 100,000 tonnes. The problem is that the decline in the supply of electrodes made in China is caused, on the one hand, by the difficulties in the needle coke market, from which the electrodes are made, and, on the other hand, by the high demand for electrodes in China itself.

According to Steelorbis, in 2017 China will produce up to 500 thousand tons of graphite electrodes, while consumption in China is 600 thousand tons. The increased demand for electrodes can be attributed to the elimination of all induction furnaces.

In addition, in recent years, the production capacity of electrode factories in the world has decreased by 200 thousand tons. This was partly the result of Chinese dumping, which pushed some competing manufacturers out of the market, offering significantly lower prices.

Now the shortage is associated not only with the increase in demand from Chinese steel mills, but also the development of the production of lithium-ion batteries, which also use graphite electrodes.

According to analysts, S & P Global Platts some factories are already suffering from severe shortages. One of the metallurgical plants in Turkey is forced to stop production. Some companies move electrodes between objects, others reuse electrodes previously found to be worn out and have been introduced.

Platts said the current supply problems have prompted some manufacturers to raise prices in contracts for the rest of the year. The increase is 40 percent and even doubling prices.

Problems may increase next year, and stabilization can only be expected in 2019.