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 European-based producers.
Mining.com writes about the background in detail in a recent article.
41% of EU crude steel is produced via EAFs
About 41% of European (EU27+UK) crude steel is produced through EAFs, which allow greater use of recycled scrap steel products and require the use of synthetic graphite electrodes that cannot be replaced with other types of lower-performance carbon electrodes.
China-Europe freeze on electrodes could lead to higher costs
According to market researcher Roskill, it is uncertain by how much costs could increase due to the China-Europe freeze. However, the increase is not expected to reach the levels seen in 2017/2018, when there was a major global electrode shortage due to a sudden dramatic increase in Chinese demand coupled with the closure of environmental plants in the Asian country.
Fluctuation in the electrode market could lead to early stockpiling in the EU
However, fluctuations in the electrode market could prompt consumers to exercise caution and stockpile early, especially at a time when global steel demand is rising and recovering from the effects of Covid-19 by 2020.
Roskill forecasts EAF steel production to rise 7.0% in 2021
“Roskill forecasts that European EAF steel production will increase by 7.0% in 2021, compared to a global increase of 6.3%, led primarily by China,” the London-based firm predicts in a recent analysis.
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