Affected by the domestic environmental protection and power restriction policy in winter time, many graphite electrode plants and raw material plants have been restricted for production or forced to stop production since late November 2020. As a result, there is a great decrease in the output of graphite electrode and a sharp rise in the price of raw materials. Due to the upgrading of epidemic prevention and control in China and the impact of the Spring Festival travel rush, domestic steel mills stock up electrodes before spring festival to ensure their stable production, which greatly leads to the decrease of electrode stocks and the shortage supply of electrodes. There is basically no spot electrode available in January and February 2021.Since February to April, some raw material manufacturers plan to stop production for maintenance, the raw material output will decrease sharply then. Moreover, the price of imported needle coke will increase by 50% in the first quarter of 2021, and the electrode price is expected to continue to rise in the first half of next year. In addition, affected by the resurgence of epidemic situation, some main highways are locked down, it greatly impact the transportation of raw material and graphite electrodes. And the plants are forced to stop production once it is found one staff is infected, and it will take at least 14+7days for quarantine per current China's strict epidemic prevention and control policy. The port logistics is affected as well, shipment is delayed at least 7-10 days, logistics costs surge high. Due to current soaring container freight rate and tight shipping space, unpredictable electrode logistics cost increases. In view of above situation, we would like to make notice of current electrode quotation and supply situation as follows:
1. The quotation is based on the FOB price, and set base price for CIF/DDP term according to current freight price, if the freight is increased further, CIF/DDP price must be adjusted.
2. Due to the substantial increase of raw material cost and logistics cost, the electrode quotation is valid for 3 working days.
We suggest that our customers place orders at least 2months in advance and arrange partial advance payment immediately according to the inventory and production plan, so as to lock order price and ensure timely delivery. We also remind our customers to keep alert for those who offer much low price to disturb the market. For such ultra-low price, you must check with the suppliers the product quality and delivery time. Many suppliers who offer low price could not deliver goods according to the contract requirement, which seriously affects the customers’ normal production.