The global graphite electrode market was valued at approximately US$ 6,564.2 million in 2019 and is projected to grow to around US$ 11,356.4 million by 2027, reflecting a compound annual growth rate (CAGR) of 9.9% from 2020 to 2027.
Graphite electrodes, which play a crucial role in steel manufacturing through the Electric Arc Furnace (EAF) method, experienced a significant surge in prices over the past year. This price increase was largely attributed to an unexpected shift in the balance of supply and demand. For several years prior, the graphite electrode sector faced challenges due to overcapacity, resulting in depressed prices. The demand for graphite electrodes, closely tied to EAF steel production, was sluggish due to slow growth in demand, an oversupply from China, and the higher costs associated with EAF steel production compared to the Basic Oxygen Furnace (BOF) method. However, the transition within the Chinese steel industry and rising concerns about greenhouse gas emissions from traditional Induction Furnaces are propelling the graphite electrode market forward. Nonetheless, the limited availability of needle coke is a significant barrier to the market's expansion.
By June 2017, the dynamics of supply and demand shifted dramatically, particularly in China, where demand began to outstrip supply. This turnaround was primarily influenced by China's stringent environmental regulations, which mandated the closure of older, less efficient, and more polluting facilities across various sectors. This regulatory change impacted China's steel and graphite electrode production, leading to the closure of approximately 170 million tonnes of steel capacity (about 15% of the total installed capacity in China) and nearly 200,000 tonnes of graphite electrode manufacturing capacity during 2016-2017. This development had profound implications for the global graphite electrode market, significantly altering its landscape.
The graphite electrode market is categorized based on product type, application, and geographical region. In terms of product type, the market is divided into high power, ultra-high power, and regular power electrodes. Needle coke serves as the primary raw material for producing graphite electrodes, which can be classified into two categories: petroleum needle coke and pitch needle coke. Petroleum needle coke is derived from decant oil (with less than 0.5% sulfur) or sweet crude, while pitch needle coke is produced from coal tar pitch, predominantly utilized by manufacturers in China. The ultra-high power segment is anticipated to capture the largest share of the graphite electrode market, while the electric arc furnace segment is expected to exhibit the highest CAGR in terms of application.
Key players in the graphite electrode market include EPM Group, GrafTech International Ltd, Graphite India Limited, HEG Ltd, Kaifeng Carbon Co. Ltd, Zhongping Energy & Chemical Group (KFCC), Nantong Yangzi Carbon Co., Ltd., Nippon Carbon Co Ltd., Sangraf International, SHOWA DENKO K.K., and Tokai Carbon Co., Ltd.
Effects of the COVID-19 Pandemic on the Graphite Electrode Market
The COVID-19 pandemic has had a profound impact on various industries globally, with the World Health Organization (WHO) identifying countries such as the US, India, Spain, Italy, France, Germany, the UK, Russia, Turkey, Brazil, Iran, and China as some of the most severely affected. The outbreak, which originated in Wuhan, China, in December 2019, has rapidly spread worldwide. The crisis has disrupted industries and is expected to severely affect the global economy in 2020 and potentially into 2021. The steel industry has faced significant challenges due to the pandemic, with international trade experiencing a sharp decline, adversely impacting the graphite electrode market. Production halts, supply chain disruptions, labor shortages, and border closures aimed at controlling the outbreak have negatively influenced the construction sector. The slowdown in construction activities has a direct effect on the demand for various steel products, thereby impacting the graphite electrode market.
The overall size of the graphite electrode market is determined through a combination of primary and secondary research methods. The research process begins with comprehensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the graphite electrode market. This research also includes an overview and forecast for the global graphite electrode market, segmented by five primary regions: North America, Europe, Asia-Pacific, the Middle East & Africa, and South America. Additionally, primary interviews with industry stakeholders and experts are conducted to validate and analyze the data. Participants in this process include industry professionals such as vice presidents, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the graphite electrode sector.