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Bright outlook for EAFs, graphite electrodes demand

Bright outlook for EAFs, graphite electrodes demand

EAF steelmaking technologies have been strongly encouraged by the decision-making bodies in China in their attempts to reduce carbon emissions and achieve sustainability in the country’s steel industry.

On October 24 this year, the Central Committee of the Communist Party of China and the State Council jointly released guidance for the country’s emissions of carbon to peak by 2030. The guidance specifies the approaches needed to reach decarbonization in the steel sector.

One of these will be to optimize industrial structures by promoting steelmaking technologies that are not based on blast furnaces (BFs). The guidance said that the standards for steel scrap recycling must be improved to promote EAF steelmaking, given that the main raw material used in EAF production is steel scrap.



According to the guidance on promoting high-quality development of the iron and steel industry issued by China’s Ministry of Industry and Information Technology at the end of last year, the proportion of EAF steel output will be increased to more than 15-20% of total crude steel output, while the scrap usage ratio will reach 30%.

The National Development & Reform Commission (NDRC), China’s economic planning body, published a plan for the country’s resource recycling industry on July 7 this year to accelerate the development of a low-carbon circular economy. The plan included a goal for scrap usage in the steel sector to reach 320 million tonnes in 2025. In 2020, the NRDC said, scrap usage was around 260 million tonnes.

Looking into the next decade, the share taken by EAF steel was estimated to reach 40% of global steel output, against 30% in 2020, with EAF steels in China at 25% of the country’s total in 2030, compared with around 10% last year, according to Fastmarkets’ steel research team.

“Apart from the support from government policies, I expect that there will be more stringent regulations on carbon emissions in the near future. The costs of short-process steelmaking when it comes to environmental protection measures are going to be lower than long-process steelmaking,” a mill source based in Hebei province told Fastmarkets.

Meanwhile, prices for graphite electrodes have been increasing for the past year, with the latest quote for ultra-high power (UHP) electrodes around 600mm at more than 25,000 yuan ($3,909) per tonne, compared with a price of around 20,000 yuan per tonne in March – a rise of 25% in only seven months. Moreover, producers expected further price rises in the near term.


Post time: Mar-01-2023