Graphite electrode makers that have seen their value erode by about 60 percent since October have more to worry. Resumption of production at China's leading graphite maker is expected to addto the supply glut and one of the largest producers of the steelmaking rawmaterial is negotiating lower prices. If adequate electric arc steel furnace capacity isn't installed quickly in China to absorb the the supply, prices could fall further. It flagged growing imports and the government’s withdrawalof anti-dumping duty on electrodes made in China in September as factors that will have a negative impact on price and volumes in India.
China’s crack down on polluting units hadsent the prices of graphite electrodes soaring. A Steel Mint report said that Chinese companies are increasing production—with an eye on exports—despite weak domestic demand and depressed domestic prices.
In an earlier report, Citi said China plans to increase production by nearly 40 percent to 800 kilotons in 2019-20, which will have a bearing on Indian producers. It estimated a capacity addition of 465kiloton in 2019, 310 kt in 2020 and 185 kt in 2021. Prices of the commodity in China have already fallen by more than 23 percent since the beginning of this year.