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Graphite electrode woes continue to plague global steelmakers

Warsaw, Poland — At some point during the graphite electrode shortage that gripped the global steel industry last year the conversation shifted regarding what previously had been a little-discussed steelmaking input.

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"Graphite electrodes have become a strategic [raw] material. It had never been traded as a strategic material before 2017," said Mark Shujun Ma, chairman and CEO of China's CIMM Group, a technology, products and services provider to the metallurgical industry.

Ma, speaking Monday during the 78th IREPAS meeting and SteelOrbis Spring Conference, said the shortage -- a convergence of capacity going offline and competition from the lithium ion battery sector for needle coke -- saw electrode prices rise tenfold in some cases.

The shortage and ensuing cost spike created a rift between steelmakers and electrode producers. Prices remain elevated and many steelmakers are still seeking dependable supply and reasonable pricing nearly a year after the situation became acute.



Celsa Group International Commercial Director Jose Angel Rey, who also spoke at the IREPAS event, said costs are still "very, very high for electrodes." Combined with elevated refractory prices, the two inputs continue to add a minimum of $30/mt more than they did previously to Celsa's cost matrix, Rey said.

Ma said he is scouting locations for a new electrode plant to be built "somewhere in Europe," possibly Poland. He did not disclose further details regarding the project or if it would be combined with the production of other materials, such as refractories.

About 200,000 mt of electrode capacity has been shut in China due to the failure to meet stricter emissions standards there. Another 200,000 mt of capacity ex-China also was shuttered as many electrode producers were squeezed to the point where they were losing money.

The closure of illegal induction furnaces in China and shift to greater EAF-based steelmaking has also increased demand for electrodes, with about 56 new EAF furnaces coming online in China by the end of this year, accounting for roughly 60 million-70 million mt of capacity, Ma said.

He conceded that since 2017, "there's [been] no friendly business relationship between the steel sector and carbon [products] sector." But he said that needs to change. Steelmakers should cultivate an "open, frank, honest relationship with the carbon manufacturers worldwide" and anti-dumping duties on Chinese electrodes should be lifted, he said.

"We need to look together to fix those problems," Ma said. "Will this affect steel production in the world? This is a deep question mark."

--Christopher Davis, chris.davis@spglobal.com

--Edited by Kevin Saville, kevin.saville@spglobal.com