European steelmakers using electric arc furnaces (EAFs) could see higher costs in their production lines as a result of a recent skirmish between Chinese exporters of synthetic graphite electrodes and Europe-based manufacturers.
Around 41% of European (EU27+UK) crude steel is produced via EAFs, which allow for greater use of recycled scrap steel products and which require the use of synthetic graphite electrodes that cannot be substituted with other types of lower performance carbon electrodes.
According to market researcher Roskill, it is uncertain by how much costs could go up due to the China-Europe impasse. Yet, the hike is not forecast to reach the levels of 2017/2018 when a major global electrode shortage took place because of a sudden dramatic rise in Chinese demand at the same time as environmental plant closures in the Asian country.
The fluctuation in the electrode market, however, could push consumers towards caution and early stockpiling, especially at a time when global demand for steel is rising, recovering from the effects of covid-19 through 2020.
“Roskill forecasts European EAF steel production to increase by 7.0% in 2021, vs. a worldwide increase of 6.3%, led mainly by China,” the London-based firm predicts in a recent analysis.
