There is a growing shortage of graphite electrodes in metallurgy

Eurofer raised an issue that was already discussed in August - European steel mills are increasingly faced with restrictions on the supply of graphite electrodes, which are necessary for the production of primary and secondary steel, from which sheet metal and other products are ultimately obtained. The lack of electrodes on the market will be even greater next year, and analysts expect improvement only in 2019.

Two thirds of the rods consumed in Europe come from China. Chinese companies have driven competitors out of the market and are now limiting their production. In recent years, the global capacity of electrode manufacturers has declined by 200,000. This was, among other things, the result of the dumping of Chinese companies, which destroyed manufacturers from other countries.

The global market for graphite electrodes is provided by a relatively small number of companies operating in a limited number of regions. Many manufacturers are based in China, others have offices in India, USA, Japan and Europe. They are all highly dependent on the availability of acicular coke. “With the declining supply of Chinese acicular and graphite coke, there is a clear lack of both materials,” says Axel Eggert.

European steel production relies on imported graphite electrodes. Approximately 226,000 tonnes of electrodes are used annually in the EU. “More than 60% of the rods come from China, which means that both primary and secondary steel production could be seriously affected by the shortage and volatility of electrode supplies,” says Axel Eggert.

Electrodes are used in arc furnaces that are the backbone of steel plants, that is, secondary steel and vacuum furnaces that are part of a system used in integrated steel mills that produce primary steel from iron ore.