The graphite electrode market is extremely capital-intensive and fiercely competitive. The complicated manufacturing process used to make graphite electrodes demands specialized equipment and knowledge that could limit the market's entry. The industry is also sensitive to the price of raw materials and availability. A significant part of the production costs being comprised of petroleum-based needle coke and high-grade coal tar pitch (as carbon aggregate and binder). Large electrode manufacturers vertically integrate by building their own coke-making facilities or securing long-term supply agreements to ensure consistent raw materials supply and control costs.
Graphite is a key ingredient in the production of steel in Electric Arc Furnace furnaces (EAF), as it melts molten iron during EAF processes. Graphite electrodes are currently consumed for those in the EAF steel industry, which accounts for 90% of all use. A majority of graphite electrodes are used in aluminum manufacturing, and in some EAF mini mill-related applications. Graphite is also used for other applications, including electric high-speed vehicles (EV) however the market size of the application is smaller.
Market dynamics in regional regions vary, based on the industrial infrastructure, production trends, and the energy sources. Asia Pacific leads in overall consumption because of the huge EAF steel production, particularly in China and India. Europe also is transitioning into EAF into UHP steelmaking which increases demand for electrodes. The Middle East and Africa are fast-growing with the expansion of industries of steel, supporting RP and HH demand for electrodes.
COVID-19 has impacted the global market for graphite electrodes, particularly in China. The reason for this was disruptions in the steel industry which is a primary consumer of the product. This crisis has accelerated the development of new technologies and re-adaptations in the field. In the wake of a recovery in the market New technologies and new applications are being developed to improve performance, reduce maintenance requirements, and expand the lifespan of electrodes.
Globally, the biggest players in graphite electrode market include Showa Denko K.K., GrafTech International Ltd, and China Graphite Electrode Technology Group Co. Ltd. Showa Denko, now operating under the Resonac brand name, is significant market share in the UHP segment as well as semiconductor-grade graphite. Its manufacturing is backed by the same supply of needle coke and advanced production lines. It invests a lot of money into R&D. 8percent of its budget is earmarked for new material innovation and eco-friendly manufacturing techniques.
Globally, the graphite market is extremely well-organized. The top four companies have more than 50% of global shares. China is by far the most prolific producer and provider of graphite electrodes. It is which is closely followed by India, Japan and Russia. China's dominant position is due to the size of its industry of aluminum and steel in the country, along with its rapid urbanization and industrialization. China has also been investing heavily in infrastructure and growing demand for the smelting process which uses graphite electrodes. This, along with an aggressive investment strategy by the Chinese government, has pushed the market for graphite electrodes worldwide. The Chinese government is likely to maintain its lead in the global market through 2030. The global market for graphite electrodes is growing within North America, with increased steel output increasing demand for EAF-based smelting methods. In addition to this, the focus of the region on sustainable production of steel and environmental sustainability has boosted RP electrode and UHP sales.
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