Graphite electrode industry – Some enterprises may be forced to stop production due to loss or capital chain rupture

August 14 12:50 2020
Due to the shortage of graphite electrodes and the rising price, carbon producers, especially graphite electrode producers, have seen unprecedented splendor in 2017 and 2018.

Due to the shortage of graphite electrodes and the rising price, carbon producers, especially graphite electrode producers, have seen unprecedented splendor in 2017 and 2018.” On December 14, 2019 (the sixth) on China’s iron and steel raw materials market high-end BBS, Chinese carbon industry association secretary-general Sun Qing pointed out that carbon industry is a national important industrial raw materials, due to the excellent characteristics of carbon materials, any metal and non-metallic materials in many special fields is irreplaceable special material, was widely application field.

“First of all, the current state of the carbon industry in Our country is a sudden explosion caused by years of downturn.From 2009 to 2016, China’s carbon industry suffered losses in successive years. However, since the beginning of 2017, some major products of carbon products have been in short supply to varying degrees and their prices have increased. Especially, graphite electrode is very obvious, which has rapidly changed from a buyer’s market to a seller’s market.

Sun Qing’s introduction

According to Sun Qing’s analysis, China’s graphite electrode demand exceeds supply, and the price rises rapidly and greatly.

First, due to the poor economic environment in the international market a few years ago, the graphite electrode production enterprises suffered serious losses, and the world-renowned carbon companies shut down or even dismantled their equipment, resulting in an international production capacity gap of 200,000 tons.

Second, the international economic recovery is weak, and China’s economic growth is slowing down. Most carbon enterprises, especially graphite electrode enterprises, suffer from serious operating losses. Most of them cannot support normal production and operation with their capital chains, and the whole industry shows a trend of substantial production cuts.

Third, China’s steel industry to cut production capacity, strike “steel”, strictly control environmental protection indicators, part of the intermediate frequency furnace to electric furnace, so that the demand for graphite electrode for steelmaking has increased considerably.

Fourth, China has a large reserve of scrap iron and steel resources, which have changed from import to export, and the price is at a low level. Coupled with the general trend of environmental protection, it strongly supports and promotes the improvement of the ratio of electric furnace steelmaking.

Fifth, with the adoption of iron measures by relevant state departments to reduce emissions and control smog, environmental supervision has become stricter, more extensive and more vigorous, and the production of carbon enterprises has been affected, resulting in a substantial reduction in the actual output of carbon products.

Sixth, due to the relatively long technological process and production cycle of carbon products, changes have occurred in the market. Due to capital and environmental protection problems, some enterprises cannot quickly resume production or increase production in a short period of time.

Seventh, with the sharp rise in the price of raw materials such as needle coke, petroleum coke and asphalt and the rapid rise in the production cost, the production cost of graphite electrode rises rapidly.

Eighth, the raw materials for the production of graphite electrode are mainly needle coke and petroleum coke. However, due to the shortage of resources, the production of graphite electrode cannot be expanded, which is difficult to meet the market demand.

“Secondly, the current situation of China’s carbon industry is the overcapacity caused by the brief glory of the carbon industry,” Sun Qing believes that in 2017 and 2018, the supply and demand relationship of main products in China’s carbon industry, especially graphite electrode, has changed significantly, which is a rare good thing for the carbon industry, which has been in the red for many years, but a bad thing for the long-term development of the carbon industry.

“Due to the attraction of windfall profits, enterprises that have stopped production need to resume production, those that have reduced production need to increase production, old enterprises need to expand production, and those that have not need to build new ones. As a result, from the second half of 2017, the transformation, expansion and construction of the carbon industry have become unstoppable,” Sun Qing thinks.

As for the development prospect of carbon industry, Sun Qing believes that carbon industry is a sunrise industry with broad prospects.The carbon industry is an important part of the national economy and even the global economy. ”With serious overcapacity, in the extremely fierce market competition, the collapse of some enterprises, but not the industry,” Sun Qing emphasized.

Carbon industry reshuffle, is inevitable. With the continuous release of new capacity in the carbon industry, the situation of oversupply has intensified, vicious competition has intensified, the sales price has been falling, and the loss area has been expanding. ”In 2020, some enterprises will be forced to stop production due to losses or capital chain rupture, and the reshuffle will gradually appear,” Sun qing predicted.

The carbon industry should strengthen its weak links and strengthen China’s carbon. ”China is a big carbon country, but not a big one. Some of our products and high-end raw materials have shortcomings, and we still rely on foreign imports,” Sun Qing said.

Media Contact
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Phone: 86 0319 5316888
Country: China
Website: https://www.ngjccarbon.com/

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