During his presentation at the SteelOrbis 2018 Spring Conference & 78th IREPAS Meeting held in Warsaw on May 6-8, Dr. Mark Shujun Ma, chairman and CEO of CIMM Group, said that the main reason for the supply shortage of graphite electrodes in China is that most of the Chinese graphite electrode manufacturers located in North China, Central China, Northeast and Northwest China are required to reduce their production by 50 percent (for those that have met the special emission standard) or to halt their graphite electrode production (for those that have failed to meet the special emission standard) due to Chinese national policies on environmental protection. He added that 407,000 mt of graphite electrode capacity in these four regions are facing environmental protection investigations, accounting for approximately 44 percent of China’s total graphite electrode capacity.
Dr. Ma indicated that there are about 46 graphite electrode production enterprises in China, with a nominal capacity of 1.1 million mt. 21 of these enterprises with a total capacity of 473,000 mt have been shut down, while some others have partially stopped or limited their production, and so the total effective capacity is now between 530,000-630,000 mt. Since 2013, in the world excluding China, a total of 200,000 mt of graphite electrode production capacity has been shut down.
Among the impacts of the graphite electrode shortage in China on domestic EAF steel production, the CIMM Group official listed increased steel production costs, steel mills’ need to keep enough electrode inventory, and the shutdown of EAF steel production. Dr. Ma said that the closing down of induction furnaces and steelmakers shifting to EAF-based production caused higher demand for graphite electrodes, resulting in increases in electrode prices.
Dr. Ma stated that about 56 new EAF furnaces are coming online in China by the end of the current year with an aggregate capacity of about 60-70 million mt. Chinese steel production from EAFs is expected to rise from a share of six percent to about 14 percent in 2020, and will increase to 30 percent in 2030, according to the plans of China's National Development and Reform Commission.