Global steel market analysis
Graphite Electrodes Market Overview
The global graphite electrodes market size is forecast to reach US$6.2 billion by 2026 after growing at a CAGR of 6.4% during the forecast period 2022-2027. The high demand for graphite electrodes in electric arc furnaces is anticipated to drive the growth of the market during the forecasting period. Electric arc furnaces use graphite electrodes in large quantities for manufacturing steel and nonferrous metals, and other smelting processes. Ultra high-power graphite electrode is expected to contribute extensively to the market’s growth owing to their higher thermal resistance and high durability qualities. The growing demand for lithium ion batteries in the automotive sector, especially in the electric vehicle segment is poised to expand the graphite electrodes market globally. Needle coke is used broadly in lithium-ion batteries as raw material. The coming years have good scope for the holistic development of the target market. However, government regulations related to industrial pollution might hinder the growth of the graphite electrodes market during the forecast period.
COVID-19 Impact
The graphite electrodes market got severely hit by the COVID-19 pandemic as there was a significant decline in the manufacturing of steel, especially in the first half of 2020. Steel production dropped sharply in many regions during the first half of 2020. According to the Steel Market Developments Q4 2020 report by Organization for Economic Co-operation and Development (OECD), regions like Europe (-17.9%), North America (-17.6%), South America (-19.9%), and Africa (-20.9%) were the worst hit in terms of steel production. On the contrary, there were regions like the Middle East (-0.5%) and Asia (-2.3%) where steel production was more resilient. Similarly, due to COVID-19, the global steel consumption witnessed a sharp decline of 2.4% in the first three months of 2020 compared to the drop in the same period one year earlier.
Graphite Electrodes Market Report Coverage
The report: “Graphite Electrodes Market Forecast (2022 -2027)”, by Industry ARC, covers an in-depth analysis of the following segments of the Graphite Electrodes Industry.
By Type: Regular Power (RP), High Power (HP), Super High Power (SHP), Ultra High Power (UHP), High Density (HD), Others.
By Raw Material: Petroleum Coke, Needle Coke, Pitch Coke, Coal Tar Pitch, Others.
By Application: Steel Manufacturing, Silicon Metal Manufacturing, Steel Refining, Smelting Processes, Ferroalloy Production, Non Ferrous Metals Production, Lithium Ion Batteries Production, Others.
By End Use Industry: Automotive, Appliances, Construction, Machinery, Transportation, Aerospace and Defense, Oil and Refinery, Others.
By Geography: North America (USA, Canada, Mexico), Europe (UK, Germany, France, Italy, Netherlands, Spain, Russia, Belgium, Rest of Europe), Asia Pacific (China, Japan, India, South Korea, Australia, and New Zealand, Indonesia, Taiwan, Malaysia, Rest of Asia Pacific), South America (Brazil, Argentina, Colombia and Rest of South America), and Row (Middle East and Africa).
Key Takeaways:
- Ultra-high power graphite electrode is projected to boost the graphite electrodes market owing to its properties like high heat resistance, crack resistance, durability, etc.
- Steel manufacturing globally is anticipated to contribute immensely to the growth of the graphite electrodes market in the forecast period. According to World Steel Association 2021 Stainless Steel Figures report, 1878 million tons of crude steel were produced in 2020 globally amid the pandemic, and this number is bigger than the 2019 crude steel production that accounted for 1869 million tons.
- Asia Pacific region is anticipated to drive the growth of the target market owing to the huge demand for production and consumption of high-quality steel. According to World Steel Association 2021 Stainless Steel Figures report, China, India, and Japan were the top three major steel producing countries in 2020 with a crude steel production figure of 1064.8 million tons, 100.3 million tons, and 83.2 million tons respectively.
Figure: Asia Pacific Graphite Electrodes Market Revenue, 2021-2027 (US$ Billion)
For More Details on This Report
Graphite Electrodes Market - By Type
Ultra-high power graphite electrode held the largest market share in 2021 and is growing at a CAGR of 6% during the forecast period. The ultra-high power graphite electrode is gaining traction due to its heavy usage in large capacity electric arc furnaces regarding steel manufacturing and refining processes. These graphite electrodes possess robust qualities such as high thermal resistance, crack resistance, durability, and superior quality which makes them a better option in comparison to other graphite electrodes. Furthermore, this form of electrode is used extensively in electric arc furnaces due to its high production efficiency and ability to reduce total production costs. Owing to such impressive features of UHP graphite electrodes, steel manufacturers globally are inclining towards UHP graphite electrodes to produce durable and high-quality steel and ultimately gain more capital. For instance, according to a 2020 report by Showa Denko, the world’s largest supplier of ultra-high-powered graphite electrodes, mentioned that its global graphite electrode business amounted to a huge figure of yen 300 billion (USD 2.73) out of which ultra-high power graphite electrode segment accounted for more than 30% share. By 2025, the company aims to expand all its top businesses that also include graphite electrode businesses, which, in turn, will expand its ultra-high power graphite electrodes market share. Similarly, GrafTech International Ltd, a US based leading graphite electrodes manufacturer which deals extensively with ultra-high power graphite electrodes, has mentioned in its second-quarter 2021 results report that the company increased the production capabilities owing to high demand for graphite electrodes, and will continue to do the same in the coming years. These positive trends in ultra-high power graphite electrode segment will ultimately boost the growth of the graphite electrodes market during the forecast period.
Graphite Electrodes Market - By Raw Material
Needle coke held the largest share in the graphite electrodes market in 2021, as it is the main raw material used in the manufacturing of graphite electrodes for the steel industry. These graphite electrodes are utilized to melt steel scraps in electric arc furnaces. Needle coke is of two types, either petroleum based or coal based. Petroleum needle coke is the most preferred needle coke in comparison to coal based, owing to the longer bake time of coal needle coke and the durable quality of petroleum needle coke. Due to the high qualities of petroleum needle coke, manufacturers are focusing to produce petroleum needle coke of the highest quality. For instance, according to the annual report for the fiscal year 2020 by US based graphite electrodes and petroleum coke manufacturing company Graftech International Ltd., Seadrift Coke LP has a massive production capacity of approximately 1,40,000 MT of petroleum needle coke, which makes it one of the largest producers of graphite electrodes globally. Seadrift Coke LP is one of the biggest acquisitions of Graftech International Ltd, and in the coming years, Graftech International Ltd aims to expand the production of super premium petroleum needle coke with the help of Seadrift, which, in turn, will boost the growth of the graphite electrodes market.
Apart from graphite electrodes, needle coke is also employed in artificial graphite which is used in the production of lithium-ion batteries for electric vehicles. Lithium-ion battery is also projected to drive the market’s growth due to the increasing demand for electric vehicles globally. Petroleum needle coke-based graphite is the desirable choice of electric vehicle manufacturers due to its ability to provide batteries with longer driving ranges and greater energy density. Graphite is the main material utilized in the production of anode material for lithium-ion batteries. For instance, the Tesla Model S has 85 kg of graphite. Going forward, the growing market of the EV segment will expand petroleum needle coke-based graphite in the lithium-ion battery sector. In a recent development, Phillips 66 has announced in August 2021 that the company will focus on the development and expansion of battery components for electric vehicles which also include lithium-ion batteries. Such growth in the lithium-ion battery sector will boost the demand for petroleum needle coke-based graphite, thereby expanding the graphite electrodes market in the forecast period.
Graphite Electrodes Market - By Application
The steel manufacturing segment held the largest share in 2021 and is growing at a CAGR of 7% during the forecast period. The segment is projected to drive the growth in the forecast period owing to the massive usage of graphite electrodes for the production of steel in electric arc furnaces. The high thermal resistance capability of the graphite electrode makes it suitable for use in the high heat environment inside the electric arc furnace. Today, there is a growing demand for the production of electric arc furnace steel globally which is a positive trend considering the fact steel production was one of the worst hit industries during the pandemic. According to World Steel Organization, crude steel production globally amounted to 167.9 million tons (MT) in June 2021, which is an 11.6% increase in steel production in the same period one year earlier. Furthermore, the expansion in construction, automotive, machinery, and other industries will demand a large amount of steel, which, in turn, will increase the massive usage of graphite electrodes.
Graphite Electrodes Market - By End Use Industry
The construction sector dominated the graphite electrodes market in 2021. The construction sector is anticipated to drive the growth of the graphite electrodes market globally during the forecast period owing to the high demand for rapid construction activity and infrastructure renovation projects in current times. The increasing activity in the building construction industry will support the demand for steel and nonferrous metals, ultimately boosting the requirement of a large number of graphite electrodes. For instance, according to the European Construction Industry Federation 2021 statistical report, the housebuilding segment in Europe is projected to have a positive investment growth rate of 5.5% in 2021. The renovation projects and new housebuilding segments are projected to witness an investment growth rate of 5.7% and 4.8% respectively. Similarly, as per the report by India Brand Equity Foundation (IBEF), Foreign Direct Investment (FDI) received by India between April 2000 and March 2021 in the construction development sector which includes built-up infrastructure, housing, and construction development projects were valued at US$ 26.08 billion. So, these increasing activities in the construction sector will drive the demand for steel and other nonferrous metals, thereby increasing the growth of the graphite electrodes market during the forecast period.
Graphite Electrodes Market - By Geography
Asia-Pacific region held the largest market share in 2021 up to 30%. The rapid expansion in the Chinese construction segment demands a large amount of steel for constructing various buildings and renovation projects. As a result of this, there has been a positive trend in steel production in 2021. According to World Steel Association, crude steel production in China amounted to 93.9 million tons in June 2021 with a positive growth rate of 1.5%. Apart from China, India and Japan produced 9.4 million tons and 8.1 million tons of crude steel with an increased production growth rate of 21.4% and 44.4% respectively. Hence, these positive trends in steel production in the Asia Pacific region will immensely contribute to the growth of the graphite electrodes market during the forecast period.
The European region is projected to witness significant growth in the construction sector. According to the European Construction Industry Federation 2021 statistical report, the European construction industry (residential, commercial, renovation, civil engineering) is projected to witness a positive investment growth rate of 4.2%, which, in turn, will drive the growth of graphite electrodes market in the forecast period
Graphite Electrodes Market Drivers
Growing market of electric vehicles globally will drive the growth of graphite electrodes market
The huge production of electric vehicles globally is expected to be a key driver in the growth of the graphite electrodes market. More electric vehicles will demand more lithium-ion batteries which will ultimately boost the requirement for more graphite electrodes. Graphite material is the key material used in the anode material in lithium-ion batteries. The new energy vehicles (NEV) and electric vehicles (EV) segment in China is increasing rapidly. As per the reports by the China Association of Automobile Manufacturers (CAAM), the Chinese automobile industry will stay on a progressive track with NEVs (New Energy Vehicles) segment witnessing more demand in the coming years. Similarly, the region in Europe is anticipated to witness a positive trend in the electrically chargeable vehicles (EVs) and hybrid electric vehicles (HEVs) segments in the coming years. As per the European Automobile Manufacturers Association (ACEA) statistics, electrically-chargeable vehicles witnessed an increase in sales as the segment made up 10.5% of total car sales in 2020 in comparison to 3% in 2019. Similarly, hybrid electric vehicles made up 11.9% of total car sales in 2020, in comparison to 5.7% in 2019. This progress in the electric vehicles segment will expand the production of lithium-ion batteries, thereby boosting the growth of the graphite electrodes market during the forecast period.
Increasing global production of steel will boost the growth of the graphite electrodes market
Steel production worldwide is witnessing a healthy production rate amid the COVID-19 pandemic. Being one of the strongly hit industries by the pandemic, steel production is on a progressive track across different regions due to its high demand in the various end-use industry such as construction, automotive, appliances, etc. According to World Steel Association 2021 Stainless Steel Figures report, crude steel production accounted for 1878 million tons in 2020 globally in which the Asia-Pacific region was the largest, producing 1388.7 million tons. The European and the Middle East region produced 139.2 million tons and 45.4 million tons of crude oil in 2020. As per World Steel Association 2021 report, the steel production market is already showing a positive sign in steel production globally which will witness high usage of graphite electrodes, thereby driving the graphite electrodes market during the forecast period.
Graphite Electrodes Market Challenges
Government regulations in China regarding industrial pollution might hinder the growth of graphite electrodes market
China is the largest production and consumption of steel in the world and has been continuously contributing to the graphite electrodes market. However, the government regulations regarding industrial pollution have been a matter of concern in the steel production in the region. According to Graphite India Limited’s Corporate Presentation August 2020 report, China has closed 300 million tons of highly polluting and outdated steel production capacity due to the government’s industrial pollution control regulations, slowing down the production of steel over the past years. Therefore, the environmental regulations in China might continue to affect the production of steel, ultimately restricting the usage of graphite electrodes and the market’s growth in the coming years.
Graphite Electrodes Industry Outlook
Investment in R&D activities, acquisitions, product and technology launches are key strategies adopted by players in the graphite electrodes market. Major players in the graphite electrodes market are:
- Showa Denko KK
- GrafTech International
- Fangda Carbon New Material Technology Co. Ltd
- Graphite Limited, HEG Limited
- Jilin Carbon Co. Ltd
- Nantong Yangzi Carbon Co. Ltd
- Tokai Carbon Co. Ltd
- Others
Acquisitions/Product Launches
In June 2020, Showa Denko KK acquired Hitachi Chemical Company (now Showa Denko Materials Co., Ltd.) which deals with graphite-based anode material for lithium-ion batteries. This acquisition will support the expansion of the graphite anode production, ultimately boosting the growth of the graphite electrodes market.
https://www.industryarc.com :source
WORLDSTEEL SHORT RANGE OUTLOOK
The World Steel Association (world steel) released its Short-Range Outlook (SRO). world steel forecasts that steel demand will grow by 0.4% in 2022 to reach 1,840.2 Mt after increasing by 2.7% in 2021. In 2023 steel demand will see further growth of 2.2% to reach 1,881.4 Mt. The current forecast is made against the backdrop of the war in Ukraine and is subject to high uncertainty.
Inflation and uncertainty cloud the outlook for steel demand
Commenting on the outlook, Mr Máximo Vedoya, Chairman of the world steel Economics Committee, said, “This Short-Range Outlook is issued in the shadow of the human and economic tragedy following the Russian invasion of Ukraine. We all wish for as rapid and peaceful an end to this war as possible. In 2021, recovery from the pandemic shock turned out to be stronger than expected in many regions, despite continuing supply chain issues and COVID waves. However, a sharper than anticipated deceleration in China led to lower global steel demand growth in 2021. For 2022 and 2023, the outlook is highly uncertain. The expectation of a continued and stable recovery
from the pandemic has been shaken by the war in Ukraine and rising inflation.”
General
The magnitude of the impact of this conflict will vary across regions, depending on their direct trade and financial exposure to Russia and Ukraine. There is an immediate devastating effect on Ukraine, consequences for Russia, and major impact on the EU due to its reliance on Russian energy and its geographic proximity to the conflict area. The impact will also be felt globally via higher energy and commodity prices – especially raw materials for steel production – and continued supply chain disruptions, which were troubling the global steel industry even before the war. Furthermore, financial market volatility and heightened uncertainty will undermine investment.
Such global spillovers from the war in Ukraine, along with low growth in China, point to reduced growth expectations for global steel demand in 2022. There are further downside risks from the continued surge in virus infections in some parts of the world, especially China, and rising interest rates. The expected tightening of US monetary policies will hurt financially vulnerable emerging economies.
The outlook for 2023 is highly uncertain. Our forecast assumes that the confrontation in Ukraine will come to an end in the course of 2022 but that the sanctions on Russia will largely remain.
Additionally, the geopolitical situation surrounding Ukraine poses significant long-term implications for the global steel industry. Among them are a possible readjustment in global trade flows, a shift in energy trade and its impact on energy transitions, and continued reconfiguration of global supply chains.
China
Chinese steel demand saw a major slowdown in 2021 due to the tough government measures on real estate developers. Steel demand in 2022 will remain flat as the government tries to boost infrastructure investment and stabilize the real estate market. The stimuli introduced in 2022 are likely to support small positive growth in steel demand in 2023. There is upside potential from more substantial stimulus measures, which is likely if the economy faces more challenges from the deteriorating external environment.
Advanced economies
Despite the sporadic COVID infection waves and the manufacturing sector’s supply chain constraints, steel demand recovered strongly in 2021, especially in the EU and the US. Howeve the outlook for 2022 has weakened due to inflationary pressure, which is further reinforced by the events surrounding Ukraine. The impact of the war will be particularly pronounced in the EU due to its high dependence on Russian energy and refugee inflows. Steel demand in the developed world is forecast to increase by 1.1% and 2.4% in 2022 and 2023 respectively, after recovering by 16.5% in 2021.
Developing economies excluding China
In the developing economies, recovery from the pandemic faced more challenges with the continued impact of the pandemic and surging inflation, which prompted a monetary tightening cycle in many emerging economies. After falling by 7.7% in 2020, steel demand in the developing world excluding China grew by 10.7% in 2021, slightly less than our earlier forecast. In 2022 and 2023, the emerging economies excluding China will continue to face challenges from the worsening external environment, the Russia-Ukraine war, and US monetary tightening, leading to low growth of 0.5% in 2022 and 4.5% in2023.
Steel using sectors
Global construction activity continued to recover from the lockdowns to record growth of 3.4% despite a contraction in China in 2021. The recovery was driven by an infrastructure push as part of recovery programs in many countries, and these and investments related to the energy transition will likely drive the construction sector’s growth for years to come. However, the construction sector faces some headwinds from rising costs and interest rates.
The recovery of the global auto industry in 2021 was disappointing as the supply chain bottlenecks arrested the recovery momentum in the second half of the year. The war in Ukraine is likely to delay any return to normal of the supply chain issues, especially in Europe. Despite the slump in global auto production, the EV segment grew exponentially during the pandemic. Global sales of EVs in 2021 reached 6.6 million units, almost doubling from 2020. The share of EVs in total car sales increased from 2.49% in 2019 to 8.57% in 2021.
:source https://worldsteel.org