Why stainless steel prices are rising

A shortage of graphite electrodes is putting in trouble the international stainless steel industry, forced to increase the selling values.

As explained by the European Steel Association, graphite electrodes, which are a significant factor in electric arc furnace steel production, are made from high quality needle coke, which has been seeing shortages in recent months.

“The global carbon graphite electrode market - explained Axel Eggert, Director General of the European Steel Association - is serviced by relatively few companies in a limited number of regions."

Many are located in China, where industry restructuring and new environmental protection measures had a big impact on the output of electrodes. In addition, as MEPS points out, the Hurricane Harvey has dramatically hit the supply of needle coke, the primary raw material for graphite electrodes, in the United States, too.

This is probably not going to be a short-term problem. Murat Cebecioglu, chairman of the International Rebar Exporters and Producers Association, expects the deficit to continue into the first half of 2019, and warns that it may affect steel production as well.

Platts reports that the graphite electrode shortage could last five years or more.

Electric arc steelmakers are exploring ways to recoup this outlay by increasing their selling values. The Finnish stainless steel producer Outokumpu formally announced on September 27 a graphite electrode upcharge for all stainless steel products with immediate effect. The initial electrode upcharge was 30 €/tonne. The figure will be updated on a monthly basis.

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