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Sun Qing: The carbon industry has changed from a buyer's market to a seller's market.

2020-03-27

China Industry News Network


Abstract

On December 14, at the 2019 (6th) China Iron and Steel Raw Material Market High-end Forum, Sun Qing, Secretary-General of China Carbon Industry Association, pointed out that due to the shortage of graphite electrodes and rising prices, carbon production enterprises in 2017 and 2018, especially graphite electrode production enterprises.

"Due to the shortage of graphite electrodes and rising prices, carbon production enterprises, especially graphite electrode production enterprises, ushered in glory in 2017 and 2018." On December 14, at the 2019 (6th) China Steel Raw Material Market High-end Forum, Sun Qing, Secretary-General of the China Carbon Industry Association, pointed out that the carbon industry is an important raw material industry in the country. Due to the excellent characteristics of carbon materials, in many special fields It is a special material that cannot be replaced by any metal and non-metal materials, and its application fields are extremely wide.

"First of all, the current situation of China's carbon industry is a sudden outbreak caused by years of downturn. From 2009 to 2016, China's carbon industry has been losing money for years, but since the beginning of 2017, some major varieties of carbon products have been in short supply to varying degrees, and prices have risen, especially graphite electrodes, which have rapidly changed from a buyer's market to a seller's market." Sun Qing introduced.

Sun Qing analyzed that the supply of graphite electrodes in my country is in short supply, and the price has risen rapidly and sharply. First, due to the poor economic environment in the international market in the past few years, graphite electrode manufacturers have suffered serious losses, and world-renowned carbon companies have shut down or even dismantled equipment., Resulting in a gap of 200000 tons in international production capacity. Second, the international economic recovery is weak, and my country's economic growth is slowing down. Most carbon companies have operating losses, especially graphite electrode companies. The losses are particularly serious. The capital chain of most companies is difficult to support normal production and operation, and the entire industry has shown a substantial reduction in production. Third, China's iron and steel industry to production capacity, combat "strip steel", strict control of environmental protection indicators, part of the medium frequency furnace to electric furnace, so that the demand for graphite electrodes for steelmaking has increased significantly. Fourth, China's large reserves of scrap iron and steel resources, from the past import to part of the export, and the price is at a low level, coupled with the general trend of environmental protection, strong support and promote the improvement of electric furnace steelmaking ratio. Fifth, as the relevant state departments adopt an iron wrist to reduce emissions and control smog, environmental protection inspections have become more stringent, broader, and stronger, and the production of carbon enterprises has been affected, resulting in a substantial reduction in the actual output of carbon products. Sixth, due to the relatively long process and production cycle of carbon products, the market has changed, and some enterprises have no way to quickly resume production or increase production in the short term due to capital and environmental protection problems. Seventh, with the sharp rise in the prices of needle coke, petroleum coke, asphalt and other raw materials and the rapid rise in production costs, the production costs of graphite electrodes have risen rapidly. Eighth, the raw materials for the production of graphite electrodes are mainly needle coke and petroleum coke. However, due to the shortage of resources and the shortage of supply, the production of graphite electrodes cannot be released and it is difficult to meet market demand.

"Secondly, the current situation of China's carbon industry is the overcapacity caused by the short-term glory of the carbon industry." Sun Qing believes that in 2017 and 2018, major changes have taken place in the supply and demand relationship of China's carbon industry, especially graphite electrodes, which is a rare good thing for the carbon industry, which has been silent and losing money for many years, but it is also a bad thing for the long-term development of the carbon industry.

"Because of the attraction of huge profits, enterprises that have stopped production have to resume production, those that have reduced production have to increase production, old enterprises have to expand production, and those that do not have to build new ones. As a result, starting from the second half of 2017, the carbon industry has undergone transformation, expansion, and new construction, which has become unstoppable." Sun Qing thinks.

For the development prospects of the carbon industry, Sun Qing believes that the carbon industry is a sunrise industry with broad prospects. The carbon industry is an important part of the national economy and even the global economy, which can never be missing. "With serious overcapacity, in the extremely fierce market competition, some companies that have collapsed cannot be industries." Sun Qing stressed.

The reshuffle of the carbon industry is inevitable. With the continuous release of new production capacity in the carbon industry, the situation of oversupply has intensified, vicious competition has intensified, sales prices have continued to decline, and losses have continued to expand. Sun Qing predicted that "in 2020, some enterprises will be forced to stop production because they can't bear losses or the capital chain is broken, and the reshuffle will gradually appear."

The carbon industry should make up for shortcomings and strengthen China's carbon. "China is a carbon power, but not a carbon power, there are some products and high-end raw materials short board, still rely on foreign imports." Sun Qing said.

(Source: China Industrial News Network)

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