Current status and analysis of graphite electrode industry

Current status and analysis of graphite electrode industry
The carbon industry is a raw material industry that is supported by the country. In the steel industry, graphite electrodes are high-temperature resistant and conductive raw materials. At present, there are more than 400 carbon enterprises in China, with an annual output of about 700,000 tons of graphite electrodes. However, only more than 50 domestic enterprises currently support this technology and large-scale production. In recent years, with the continuous improvement of the steel industry structure, the replacement of small and medium-sized heating furnaces, and the rapid development of high-power and ultra-heavy heating furnaces, the requirements for large, medium and small power engineering graphite electrodes have been greatly reduced, and the supply is seriously oversupplied. The supply and demand relationship of high-power graphite electrodes is relatively stable. Due to the global economic recession, the global demand for graphite electrodes has dropped sharply, and the contradiction between supply and demand in the domestic market has intensified, causing graphite electrode companies to often suffer losses.

(I) Serious overcapacity

After China's rapid economic development and growth, the economic growth rate exceeded 10%, which promoted the development trend of the carbon field of intimate service. Taking the main raw material of the steel industry, graphite electrodes for steelmaking, as an example, by the end of 2018, my country's production capacity of graphite electrodes reached 700,000. At present, my country's graphite electrode production capacity has reached 586,600 tons and consumption has reached 310,000 tons. Among them, the output of large-scale graphite electrodes reached 26.27%, reaching 15.4100 tons. The demand for large-size graphite electrodes is increasing day by day. With the outbreak of the financial crisis, the supply and demand relationship has become increasingly tense, competition has intensified, and market competition has become increasingly fierce. In solving the problem of overcapacity, the following issues should be paid attention to. First, the current surplus is a structural surplus and a low surplus. The supply capacity of traditional power engineering and high-power electric grades is in excess, and the supply of large and medium-sized graphite electrodes, especially super-large and ultra-high electric grades, is in obvious shortage. Too many problems must be distinguished. Second, overproduction refers to the regular overproduction generated in production and processing, rather than a significant increase in supply. This vicious price competition will bring huge losses to the entire graphite electrode industry, thereby affecting the healthy development of the entire graphite electrode industry.

(II) Unreasonable product structure

The consumption of graphite electrodes is closely related to the production of electrical steel, industrial silicon, abrasives, yellow phosphorus and other products. Against the background of slowing economic transformation, the production scale of traditional power electrodes continues to grow rapidly, but the speed of product structure adjustment is relatively slow. Therefore, the current supply and demand relationship of graphite electrodes in the coal industry is basically that the supply of graphite electrodes exceeds the supply of electricity, and the supply and demand of power electrodes are balanced. The supply and demand of traditional power electrodes are both strong. In terms of diversified structure, there is a large gap between my country and the world's advanced level [1]. UCAR in the United States, Tokai in Japan, Showa Electric and others are all ultra-high power electrodes, 80% of which are ultra-high power electrodes with a diameter of more than 500 mm. However, the current domestic production of large electrodes is only 27%. Large high-power electric furnaces can save 10% to 20% of electricity. Increasing the power of steelmaking electric furnaces can reduce smelting time by 20%. The overall cost can be saved by more than 10%, and the development of ultra-high power steelmaking electric furnaces is an inevitable trend.

(III) Unclear professional division of labor

In order to better ensure the competitiveness of equipment, internationally renowned carbon enterprises such as UCAR in the United States have implemented strict technical management systems in various enterprises. Among these production lines, 1~2 are specialized in the production of composite products, while other factories are specialized in manufacturing for specific products. In addition, the same is true for internationally renowned carbon enterprises such as SGI-Dahu and SDK. At present, the professional division of labor of my country's graphite electrode manufacturing enterprises is unclear. Most domestic enterprises produce ordinary, high-power, and even ultra-power electrodes according to product types. Connection between power supply and electrode. Technically, the electrode with a smaller production scale needs to be about Ø300 mm, while the size of the large electrode is Ø600 mm. Therefore, the production organization and management are very complicated, and it is difficult to ensure large-scale production.

(IV) High dependence on foreign main raw materials

The main component of graphite electrodes is needle coke. The use of ultra-high-power needle coke electrodes can shorten the steelmaking time by 30%~50%, save 10%~50% of electricity, and greatly reduce the cost of steelmaking. At present, the production technology of needle coke in my country is mostly monopolized by a few countries such as the United States and Japan, and China's needle coke production still relies on imports. The price of needle coke has also continued to rise due to the monopoly of foreign technology: in 2008, the price of oil-based needle coke rose by $400 compared with 2007. The United States rose by 80% in 2009, and Japan rose by 70%. At present, the main raw materials of domestic graphite electrodes are monopolized by foreign countries, which has become an important factor restricting its development. Therefore, China's graphite electrode industry should increase its cooperation with the needle coke industry and accelerate the update of its core technology.

(V) Weak voice in cooperation with downstream users

Along with the development trend of my country's steel industry, the concentration of my country's steel industry is also gradually developing. Since the steel industry is the main force of market competition, its management is becoming more standardized and stricter, and the punishment for unfair competition and corruption is also becoming more stringent. The overproduction of graphite electrodes in China and the demand for imported goods have objectively provided a lot of opportunities for the steel industry, while at the same time weakening the right to speak in the field of graphite electrodes in my country. In marketing practice, some steel mills no longer accept the quotations of graphite electrode manufacturers, but adopt the method of self-pricing to force them to accept. In the implementation process, some steel enterprises with certain strength will even force the contract delivery price to be reduced, thereby forcing graphite electrode suppliers to extend the time of accounts receivable.

(VI) Weak R&D and technological innovation of high-end products

Large (700 mm) graphite electrodes cannot be mass-produced in my country at present due to factors such as management, equipment, roasting furnaces, funds, process flow, and raw materials, and need to be imported in large quantities. Technological innovation is an important force to promote industrial development and economic development. The technological innovation ability of my country's graphite electrode industry is relatively weak, and there is a big gap compared with international peers and domestic advanced industries.

(VII) Overcapacity disadvantage

At present, the domestic graphite electrode production capacity is seriously oversupplied, and structural imbalance has become a consensus. China and international consumption are slightly increasing every year, but there is not much room for development. However, many companies are expanding or building new buildings to expand existing production capacity, and there are more carbon companies and projects. In the long run, the imbalance between supply and demand will further deteriorate, and the carbon market will face a serious crisis. Overcapacity is bound to lead to intensified market competition, and even competitive price cuts and disorderly competition, which will make the market uncontrollable and reduce the productivity of the entire industry.

(VIII) Unclear strategy

In general, Chinese graphite electrode companies have weak problems in development strategy management, lack of mastery of corporate strategy management, lack of huge contingency and one-sidedness, and reasonable decision-making methods. Some companies either do not have long-term development plans or lack strategic plans. Many companies are blind in understanding and analyzing the market and competition situation, and lack quantitative and objective analysis. The strategic management of some companies is too "virtual" and there is no clear implementation plan. In recent years, with the global economic integration, the continuous changes in the market environment, and the complexity of market competition, the overall operating performance of the graphite electrode industry has been poor, and its operating strategy problems have become a major obstacle to the development of my country's graphite electrode industry.

(IX) The performance of enterprises in the industry is not high

The return on capital is the ratio of total income, tax and total assets obtained in a specific period. This is the overall economic benefit of an enterprise and its contribution to the development of the national economy. The working capital turnover rate is an indicator to measure the flow rate of an enterprise's operating capital. The enterprise has a high asset utilization rate, a long turnover cycle, a fast capital flow rate and a high capital utilization rate. The core earnings growth rate is the ratio of the enterprise's core earnings in the current year to the total revenue of the previous year. It is an important indicator to measure the development prospects and development opportunities of the enterprise. The debt-to-asset ratio is the ratio of the total liabilities of the enterprise at the end of the year to the total assets. It reflects the proportion of the total assets of the enterprise. This ratio is a comprehensive enterprise debt. The three aspects of expenses are: management expenses, sales expenses, and financial expenses. The cost-benefit ratio is an important indicator to measure the operating ability and benefits of an enterprise.