Graphite Electrode Market Analysis

Graphite Electrode Market Analysis

The graphite electrode market size is estimated at USD 10.19 billion by 2024 and is expected to reach USD 13.37 billion by 2029, growing at a CAGR of 5.59% during the forecast period (2024-2029). In 2020, the market was negatively impacted by the COVID-19 outbreak. However, the market has recovered substantially in 2021 as major end-user industries resumed operations. In the short term, strong growth in steel production in emerging countries and increasing scrap availability in China are expected to drive the growth of the market. On the other hand, surging needle coke prices may hamper the growth of the market studied. Increasing steel production in China through electric arc furnace (EAF) technology is expected to be an opportunity for the market in the coming years. Asia Pacific is expected to dominate the market due to strong demand from China.

Graphite Electrode Market Trends
The Electric Arc Furnace Segment to Dominate the Market
Electric Arc Furnaces (EAF) melt scrap, DRI (direct reduced iron), HBI (hot briquetted iron, i.e. compressed DRI), or solid pig iron to produce steel. In the EAF route, electricity provides the power required to melt the raw materials. Graphite electrodes are primarily used to melt scrap steel in the electric arc furnace (EAF) steelmaking process. Electrodes are made of graphite because they can withstand high temperatures. In an EAF, the electrode tip can reach 3,000°F, which is half the temperature of the sun's surface. The size of the electrode varies greatly, from 75 mm in diameter to a maximum of 750 mm and up to 2,800 mm in length. Electric arc furnaces (EAFs) in steel mills and steel foundries typically use UHP electrodes (typically 350 mm and above) and HP and UHP electrodes (typically 400 mm and below), respectively. The recent surge in graphite electrode prices has pushed up costs for EAF steel mills. As of February 16, 2022, the average price of graphite electrodes in my country has risen by 5.17% from the beginning of the year and 44.48% from the same period last year. In China, EAF steel accounts for about 10% of the overall share. However, the situation is expected to change due to the increasing supply of domestic scrap steel and government policies supporting scrap steel utilization. Due to these factors, the demand for graphite electrodes in electric arc furnace applications is expected to grow steadily during the forecast period. Downstream graphite electrode steel mills are in a state of recovery. Graphite electrode inventories are insufficient compared to previous years. As steel mills resume operations, demand is expected to increase. According to the World Steel Association, crude steel production in 63 countries was 142.4 million tons in February 2023. The Middle East produced 3.5 million tons of crude steel in February 2023. This is an increase of 11.5% compared to the same period in 2022. Therefore, the price of graphite electrodes will increase during the forecast period due to strong demand, limited supply, and high costs.