Russia continues to show high level of steel production and remains a priority area for many foreign suppliers to sell graphite electrodes, so consumers can have discounts.
The steel production of Russia in September was 5.98 million tons, reduced 0.8% from August, but an increase of 2.9%. Meanwhile, Russian steel mills may not be possible to exceed the total steel output of the whole last year. Actually, this year Russia has no choice but to reduce steel production, the main consumer industries in domestic market are slowing down, and the increase in exports will only avoid the continuous decline in steel production (the current forecast for 2020 is a drop of 1.3%). The production is predicted to resume in 2021, reaching 1.4% year-on-year.
Due to increasingly fierce competition, electric furnace steel producers may face pressure, their flexibility will be restricted because of the high cost of scrap steel. It should be noted that the production profit of converter steel in October was $62/ ton higher than that of electric furnace production.
With the rise of graphite electrode quotations, Russian consumers are actively purchasing new batches of raw materials. At the same time, the competition in this field is still fierce, especially considering the reduction in consumption in other countries.
Consumers insisted on asking for discounts, including due to the devaluation of the Russian currency. The exchange rate in October is 1 US dollar=77.94 rubles (an increase of 2.3%).
Based on these data, combined with the factors of rising raw material prices and ocean freights, it can be foreseen that the trend of graphite electrode prices will maintain to rise in the near future.
Moreover, the current graphite electrode market is in short supply, purchasers can consider other areas like Asian countries, such as Japan, South Korea, especially China, because of the significant quality and better price. It’s worth mentioning that China has fully resumed production in post-pandemic time. It was known that Chinese graphite electrodes manufacturers have built many new factories in 2020, invested in new advanced equipment and capital, greatly improved product quality and production capacity. To the buyer, holding a positive attitude and grabbing the chance to purchase in time is the best choice.