Over 90% of the electrodes sold go to steel plants (either EAF mini-mills, or integrated plants using electric arc furnaces). The remaining electrodes are used for aluminum production (mainly in cathode processes, and some special applications), and steel foundries. The steel industry therefore drives the overall end-use market. Global steel production, industrialization, and the demand for high-quality, aerospace, automotive and oil and gas applications are expected to drive the market over the forecast period.
The environmental concern, along with the increased demand for steel of higher quality, is driving the move from the Blast Furnace/Oxygen Furnace to the Electric Arc Furnace, which is less polluting and more efficient than the BOF process. The demand for EAF-grade electrodes is a result of this.
Asia is home to the majority of major players on the market, while a few European producers also exist. The industry is moderately condensed, and the top 5-6 players control roughly half of total market value. Typical suppliers of graphite electrodes are large, multinational corporations with diversified business lines and longstanding supply agreements with major Steelmakers. They have a range of production assets to ensure adequate capacity for their domestic markets, while also supplying export customers.
Graphite is made from high-grade coal-tar pitch and petroleum-derived needle-coke. These are used as carbon aggregates and binder. Needle coal is primarily produced by petroleum refiners. While coal tar pitch is an byproduct from coal-fired energy generation. The larger electrode producers often vertically-integrate, building their coke plants in order to control quality and secure a steady source of materials. They also often enter into agreements with needle-coke producers to optimize their supply chain and ensure the availability of raw materials.
A recent rebound in China's iron-and-steel manufacturing sector will also boost the graphite electrodes market. The country is pushing steelmakers towards cleaner technologies, such as the EAF process, due to stricter air quality regulations. The Chinese government's determination to reduce pollution will probably further propel the growth of this industry.
Graphite prices are being impacted by several factors despite strong market drivers. Electric arc-furnace mills face increased operating costs as a result of the shortage and price increase of a crucial raw material. In order to maintain their production, they are forced into night and weekends shifts. It will also lower demand for GEs.
A growing focus in different industries on circular economy is also driving the graphite electrodes market. This will increase the use of recycled product graphite. A technological advancement will also allow industries to recycle waste electrodes more efficiently. In turn, the graphite electro waste recycling market should grow considerably over the forecast period.
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