Analysis of Core Influencing Factors on Graphite Electrode Price Fluctuations
As a key consumable in steelmaking, new energy materials and other fields, graphite electrode prices fluctuate under the combined influence of upstream and downstream industrial chains, policy environments, market competition, and macroeconomics. They exhibit the characteristics of “cost-driven as the mainstay, supply and demand dominating trends, and policies and market competition amplifying fluctuations”. Based on industry operation rules, the key factors affecting price fluctuations are detailed below from six core dimensions:
I. Supply and Demand Dynamics: Core Dominant Factor of Price Fluctuations
The balance between supply and demand is the foundation for determining graphite electrode prices. Rigid changes on the demand side and production capacity flexibility on the supply side directly dominate price trends, showing the characteristic of “structural supply-demand mismatch”.
(A) Demand Side: Driven by Two Core Sectors with Significant Demand Elasticity
- Steel Industry Demand (Accounting for Over 70%)
The core demand for graphite electrodes comes from electric arc furnace (EAF) short-process steelmaking, and its demand changes directly determine price trends. On one hand, the global “dual carbon” goals are promoting the transformation from long-process steelmaking (blast furnace) to short-process steelmaking (EAF). The increase in the proportion of EAF steel output directly drives the demand for high-power (HP) and ultra-high power (UHP) graphite electrodes—for every 1 percentage point increase in China’s EAF steel ratio, the corresponding demand for graphite electrodes increases by about 50,000 tons, driving prices up. On the other hand, adjustments in steel industry operating rates and crude steel production (such as production restriction policies) will directly lead to phased demand contraction. For example, domestic crude steel production restrictions in 2023 caused a 10% decline in graphite electrode demand and a phased price drop of 15%-20%. In addition, although the demand from mineral hot furnace smelting industries such as industrial silicon and yellow phosphorus accounts for less than 20%, the expansion of industry production capacity (such as increased industrial silicon capacity) will also form demand growth and amplify price fluctuations.
- New Energy Sector Demand (Rapid Growth Engine)
The explosive demand for high-end graphite raw materials (needle coke, special graphite) used in lithium battery anode materials has become a new engine driving graphite electrode prices. The global compound annual growth rate (CAGR) of graphite raw materials for anode materials is expected to exceed 25% between 2025 and 2030, and China’s total anode material output is projected to reach 3.26 million tons in 2026. This will directly drive the demand growth for high-end needle coke and UHP electrodes, resulting in a tight balance between supply and demand for high-end products and further widening the price gap with ordinary power electrodes. Meanwhile, the growing demand for high-purity graphite in high-end manufacturing fields such as semiconductors and nuclear power will also enhance the premium capacity of high-end graphite electrodes.
(B) Supply Side: Constrained by Production Capacity Structure and Insufficient Supply Elasticity
- Production Capacity Pattern and Utilization Rate
The graphite electrode industry has a high degree of production capacity concentration, with the top 10 enterprises in China accounting for 68% of the output. Production capacity adjustments by leading enterprises have a significant impact on supply. If leading enterprises reduce production capacity due to maintenance or environmental restrictions, the supply gap will be difficult to fill in the short term, pushing prices up. Conversely, blind expansion of low-end production capacity by small and medium-sized enterprises (for ordinary power electrodes) will lead to oversupply and price pressure. In 2024, the domestic graphite electrode capacity utilization rate remained at 75%-80%. If the utilization rate rises above 85%, tight supply will support price increases; if it falls below 70%, prices are likely to decline.
- Technical Barriers and Product Structure
High-end products such as UHP electrodes and special graphite have high technical barriers (e.g., needle coke purification, graphitization process), with a long production capacity expansion cycle (1-2 years) and low supply elasticity. Once demand grows, a supply-demand gap is likely to occur, leading to significant price increases. In contrast, ordinary power electrodes have low technical thresholds and rapid production capacity expansion, making them prone to overcapacity with small price fluctuations and long-term pressure.
II. Raw Material Costs: Core Driver of Price Fluctuations (Accounting for Over 65%)
In the production cost of graphite electrodes, raw materials (petroleum coke, needle coke) account for 65%-70%, and graphitization electricity costs account for 20%-25%. Fluctuations in raw material prices are directly transmitted to graphite electrode prices, serving as the core driver on the cost side.
(A) Core Raw Materials: Needle Coke and Petroleum Coke
- Needle Coke (Core Raw Material for High-End Electrodes)
Needle coke is divided into oil-based and coal-based types. UHP electrodes require high-end oil-based needle coke, and currently, domestic high-end oil-based needle coke still relies on imports (import dependence exceeds 30%). Import prices are significantly affected by international oil prices and operating rates of overseas production capacity. If international oil prices rise or overseas production capacity undergoes maintenance, the import price of needle coke will increase, directly pushing up the cost of UHP electrodes. If the release of domestic needle coke production capacity (Sinopec, Shandong Yida, etc.) falls short of expectations, the supply-demand gap will widen, and high needle coke prices will support the upward trend of UHP electrode prices. In 2025, domestic needle coke prices rose by 15%, directly increasing UHP electrode costs by 8%-10%.
- Petroleum Coke (Basic Raw Material)
Petroleum coke is the basic raw material for producing needle coke and graphite electrodes. Its price is directly related to international oil prices, operating rates of oil refineries, and low-sulfur coke supply. Low-sulfur high-quality petroleum coke (sulfur content < 2.0%) is crucial for producing high-end electrodes. Domestic low-sulfur coke accounts for less than 35%, requiring large-scale imports (import volume exceeding 2 million tons in 2025). If international oil prices rise or overseas low-sulfur coke supply tightens, petroleum coke prices will increase, transmitting to the cost side of graphite electrodes. Conversely, falling oil prices and increased operating rates of oil refineries will lead to lower petroleum coke prices, alleviating cost pressure on graphite electrodes.
(B) Energy Costs: Graphitization Electricity Prices
Graphitization is a key link in graphite electrode production, with electricity costs accounting for over 70% of the graphitization process cost. Therefore, fluctuations in electricity prices directly affect production costs. Domestic graphitization capacity is mainly distributed in western provinces such as Inner Mongolia and Xinjiang, relying on green electricity (wind power, photovoltaic power) and thermal power. If local electricity prices increase, green electricity subsidies are phased out, or coal prices rise leading to higher thermal power costs, graphitization costs will increase, driving up graphite electrode prices. Conversely, lower electricity prices and sufficient green electricity supply will ease cost pressure and weaken price growth momentum. In 2024, electricity prices in Inner Mongolia increased by 5%, leading to an increase in graphitization costs of about 300 yuan/ton, which was directly transmitted to the terminal price of graphite electrodes.
III. Policy Environment: Important Regulatory Factor of Price Fluctuations
Domestic and foreign policies indirectly amplify graphite electrode price fluctuations by affecting supply, demand, or trade links. The stronger the policy orientation, the more significant the price fluctuations.
(A) Domestic Policies: Environmental Protection, Energy Consumption, and Resource Control
- Environmental Protection and Energy Consumption Policies
Graphite electrode production (roasting and graphitization links) is a high-energy-consuming and high-pollution industry. “Dual control of energy consumption” and “environmental protection production restriction” policies directly restrict production capacity release. For example, in 2023, many domestic regions required graphite electrode enterprises to reduce production by 30% to meet energy consumption targets, leading to supply contraction and a short-term price increase of 20%. If environmental supervision is tightened (such as improved requirements for VOCs treatment and solid waste disposal), enterprises’ technological transformation investment will increase, raising production costs and pushing up prices. Conversely, during periods of loose policies, increased production capacity release will put pressure on prices.
- Resource Control Policies
The Ministry of Industry and Information Technology implements “rare earth-style” control over graphite resources, restricting low-price mining and disorderly exports to ensure the security of graphite resource supply. Strengthened resource control will tighten the supply of graphite raw materials and drive up prices. Meanwhile, the “14th Five-Year Plan for the Development of New Materials Industry” supports high-end carbon materials (nuclear-grade graphite, graphite for lithium battery anodes), promoting enterprises to transform to high-end products and eliminate low-end production capacity. This further exacerbates the tight balance between supply and demand for high-end products and amplifies price differentiation.
(B) International Policies: Trade Barriers and Carbon Tariffs
- Anti-Dumping and Trade Restrictions
China is the world’s largest exporter of graphite electrodes. Changes in overseas trade policies directly affect export volume, thereby impacting domestic supply, demand, and prices. For example, the Eurasian Economic Union imposes anti-dumping duties of 20.08%-22.51% on Chinese graphite electrodes, and Turkey has raised import control standards, leading to hindered domestic exports, inventory backlogs, and phased price declines. If overseas trade barriers are relaxed, export volume will increase, easing domestic supply and demand pressure and pushing up prices.
- Carbon Tariff Policies
The EU’s Carbon Border Adjustment Mechanism (CBAM) includes graphite electrodes in its regulatory scope. Graphite electrodes exported to the EU are required to pay carbon tariffs, leading to increased export costs. Enterprises may pass these costs on to terminal prices. Meanwhile, carbon tariffs promote the green transformation of domestic enterprises, increasing technological transformation investment and further pushing up production costs, supporting price increases.
IV. Market Competition Pattern: Elastic Influencing Factor of Price Fluctuations
The industry competition pattern determines price elasticity. The monopolistic power of leading enterprises and the degree of low-end overcapacity directly affect the magnitude and sustainability of price fluctuations.
- Monopolistic Power of Leading Enterprises
Leading enterprises hold a monopolistic position and have price dominance. If leading enterprises jointly restrict production and support prices, prices are likely to rise. Conversely, if leading enterprises cut prices to seize market share, it will trigger an industry price war and lead to rapid price declines. This directly drove an 18% increase in UHP electrode prices.
- Low-End Overcapacity
Ordinary power electrodes have low technical thresholds, and blind expansion of small and medium-sized production capacity has led to overcapacity. The industry is undergoing continuous capacity reduction. If the withdrawal of low-end production capacity falls short of expectations, it will trigger price wars and suppress overall price increases. In contrast, high-end UHP electrodes have high technical barriers and high production capacity concentration, with moderate competition, strong price premium capacity, and smaller fluctuation ranges than ordinary power electrodes.
V. Macroeconomics and Alternative Materials: Peripheral Influencing Factors of Price Fluctuations
(A) Macroeconomic Environment
Global economic growth and the prosperity of the steel industry are directly linked to graphite electrode demand. If global economic growth slows down (e.g., 3.0% global GDP growth in 2023), steel industry demand will weaken, EAF operating rates will decline, graphite electrode demand will contract, and prices will fall. Conversely, economic recovery will drive steel demand growth and push up prices. In addition, fluctuations in the US dollar exchange rate affect export prices—a stronger US dollar and weaker RMB enhance the price competitiveness of Chinese graphite electrode exports, increasing export volume and supporting domestic prices; a weaker US dollar increases export costs and puts pressure on prices.
(B) R&D Progress of Alternative Materials
In the long run, the R&D and application of alternative materials will affect graphite electrode demand and thus prices. For example, the R&D progress of titanium dioxide conductive materials and graphene-modified electrodes in lithium battery anodes and steelmaking fields. If alternative materials achieve cost reductions and performance improvements, they will squeeze graphite electrode demand, leading to long-term price pressure. Currently, alternative materials are still in the R&D stage and have not been widely applied, having limited impact on short-term prices. However, long-term risks of fluctuations caused by technological breakthroughs need to be guarded against.
VI. Summary: Price Fluctuation Logic Under Multi-Factor Superposition
Graphite electrode price fluctuations are the result of the combined action of multiple factors: “cost-driven (raw materials, energy), supply-demand dominated (steel + new energy demand, production capacity structure), policy regulation (environmental protection, trade), competition amplification (industry pattern), and peripheral influences (macroeconomics, alternative materials)”. In the short term, raw material prices and supply-demand balance are the core determinants of prices; in the medium term, policy orientation and industrial capacity structure adjustment dominate price trends; in the long term, new energy demand growth and alternative material progress will reshape the logic of price fluctuations. To grasp the laws of price fluctuations, it is necessary to focus on tracking needle coke/petroleum coke prices, EAF operating rates, environmental protection policies, and production capacity adjustment trends of leading enterprises.
Post time: Jan-04-2026