As of March 11, Mysteel's benchmark price for 350mm diameter UHP electrodes in East China's Jiangsu province stood at Yuan 15,000/tonne ($2,113/t), lower by Yuan 300/t on month, and that for the 600mm electrodes also lost Yuan 300/t on month to Yuan 17,200/t, both including the 13% VAT.
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Most electric-arc-furnace (EAF) steelmakers in China suspended their production during the Chinese New Year holiday in mid-February, before their profit margins turned negative rapidly later that month, both of which weakened mills' demand for feed materials and weighed on domestic electrode prices as well, Mysteel Global learned.
In March, EAF mills' electrode consumption will show a marked increase as they restart operations from their holiday breaks, according to Mysteel's survey. The average capacity utilization rate among the 87 independent EAF steelmakers under Mysteel's regular tracking had jumped 19.19 percentage points from the end of February to touch 48.3% by March 7, and the mills will bring more idled furnaces back online this month, the survey showed.
On the other hand, domestic producers of graphite electrode have seen their production costs rise continuously since January and may keep climbing in March, as the prices of coal tar pitch are climbing steadily, while those of petroleum coke and needle coke are stable, according to Mysteel's statistics.
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For example, Mysteel's assessment of medium-temperature coal tar pitch in North China's Hebei &#; the country's major steel producing base &#; stood at Yuan 5,400 t/d including the 13% VAT as of March 11, higher by Yuan 300/t from the end of February.
As a result, electrode producers are likely to incur higher production costs in March, which will provide firmer support for the prices of domestic UHP graphite electrodes, Mysteel Global noted.
Written by Anthea Shi,
Edited by Alyssa Ren,
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