Japan Electric Furnaces’ Electrode Cost to Decline in F2011

Japanese graphite electrode makers and electric furnace steel makers are almost concluding the electrode price negotiation for fiscal 2011 starting in April. The price apparently decreased by several tens of thousands yen to around 500,000 yen per tonne for standard size with 14-24 inches diameter while the price depends on the transactions. The buyers required price down when the material of needle coke cost increased slightly for first half of fiscal 2011. The suppliers failed to increase the price while they tried to increase the price under tight electrode supply and increasing oil price, which would impact on needle coke cost.

The electrode domestic selling price hit the highest price at more than 650,000 yen per tonne in fiscal 2009. However, the price decreased to less than 600,000 yen in fiscal 2010 when needle coke price decreased. Japanese electric furnace steel makers required lower electrode price when needle coke cost increase is less than 10% for first half of fiscal 2011.

Japanese electrode export price hit bottom at FOB US$ 5,000 per tonne recently when the makers get higher new orders. The price could increase under tight supply worldwide while oil market price increased to more than US$ 100 per barrel recently while the price dropped after Lehman shock. The Japanese electrode makers increase the offer price for export to secure profitability.