The tsunami situation of the current GE market price
Date: Jan 03 2018
Recently, the price of Graphite electrode continues to rise; now the price is 16% more than that at the end of DEC.2017, and the supply is still in serious shortage. Affected by the environment protection requirement of heating season in China, the production of some GE manufacturers are required to be limited, some baking and Graphitization process are stopped, the total GE production shrank seriously, and the domestic steel plants replenish their stock to centralized purchase the graphite electrode before Chinese spring festival (the middle of Feb.) make the serious supply shortage and price increased to nearly the highest point in the history. Once the heating season end, then the stopped and limited manufacturer could recover their production gradually, so the GE price will be increasing continuously and maintain at very high level at least till May to June of 2018.So now we suggest you to confirm the order of the first half of 2018 in this month ASAP, otherwise, the stock will be less and less in the market, you may not get any goods in FEB., and we will have nearly 10 days holiday for Chinese spring festival in Feb., thus the order and shipment will be seriously affected.
In the tsunami situation of the current market price, it is recommended that the price has to be increased to ensure ontime delivery trial, since the current market price is soaring in China, all the customers are urgent to make 100% advance payment for all the contracts signed and being talked about; The contract does not mean that the goods can be obtained as scheduled, in order to guarantee to access the goods, the customers have to agree to modify the price according to the current market price with immediate prepayment so as to grab one piece of meat from the tiger's mouth. We are also facing such an unprecedented market pressure, the unethical situation unfortunately happens again like a tsunami. In the affected areas, only the fully capable sellers and buyers can survive. We suggest that in this situation, the buyers take three actions according to their production needs. Firstly, if you have more than three months of stock, you can postpone orders and delivery. Secondly, if you have more than six months of stock, you won't consider ordering in recent months. Thirdly, if your stock is less than three months, you have to accept the Chinese market price and prepayment to grab ordering ahead of other buyers. Only in this way can we guarantee the quantity and the shipment to meet the production needs.
In the meantime, we remind our customers, in the very shortest time to sign contract without specific price, only indicating the quantity and delivery time, that is, the contract with fixed quantity and non-fixed price. It is to ensure they could obtain certain quantity to satisfy their production requirement in the case that shortage supply is more serious than 2017. The price could be confirmed in 3 weeks before the shipment, or confirmed per current market price. If it is based on current market price, customers should arrange full advance payment to our account within 3 days after signing contract, in that case, we could guarantee the quantity and delivery time.
Our proposal is based on a comprehensive analysis of global graphite electrode production & supply and growth demand data, especially the analysis of Chinese graphite electrode production quantity uncertainty and huge rapid growth demand data. That is the most pragmatic, most operable and only one reliable solution to ensure the customers could obtain certain graphite electrode quantity to meet their production requirement. In 2017, many customers adopted our solutions. As a result, they gained stable material supply and competitive strength to meet their production need. In a meantime, they saved a lot of time and production cost.
The sales contract and production schedule of all Chinese carbon plants are fully committed for 2018. There is almost no extra production capacity. In order to meet certain demand in the international market and continue to execute the international market exploration plan, we reserve a very limited quantity and capacity. It is estimated that such limited quantity and capacity will be allocated to some outstanding customers. Therefore, we suggest our customers actively change their purchasing methods and purchasing decision methods in accordance with their own demand and long term state of serious shortage supply in the market, to get certain quantity and capacity to meet their production requirement.
Dr Mark Shujun Ma
Ark Of China
Ark of China Network Technology Co., Ltd.
China Metallurgical Engineering & Design Consortium
Ark of China Advanced New Material Liaoning Co., Ltd.
(200000mt CPC & 100000mt UHP graphite electrode project)
CIMM Information Technology Co., Ltd.
CIMM Automation Engineering & Technology Co., Ltd.
CIMM Environmental Engineering Co., Ltd.
CIMM Donghai Advanced Carbon Co., Ltd.
Vice Chairman of China Association of Small and Medium Enterprises
Following links to down the original letters:
Current GE Situation and Suggestions1216.pdf
The tsunami situation of the current GE market price0103.pdf