Russia’s Energoprom is planning to invest into production capacity modernisation and expansion to address the shortage of graphite electrodes on the global market. This was announced by the firm’s chief executive, Viktor Nechuyatov, during a working group meeting last week with Russia’s Federal Antimonopoly Service (FAS).

The FAS organised the meeting to discuss the supply-demand balance and prices of graphite electrodes, as well as the possibility of reducing anti-dumping duties on imports of electrodes into Russia.

“We understand that there is a complicated situation with the supply of graphite electrodes, both on the domestic and foreign markets, which is reflected in the pricing of Russian and foreign suppliers,” FAS industry control department head Nelly Galimkhanova said at the meeting, according to an FAS statement seen by Kallanish. “We’ve observed a significant increase in prices, which affects consumers.”

Stricter environmental regulation in China and increased electric arc furnace route steel production globally have led to a scarcity of graphite electrodes in China and consequently higher prices worldwide, Nechuyatov said. Hebei, Shanxi and Shandong provinces have stopped 80,000 tonnes/year, 50,000 t/y and 36,000 t/y respectively of electrodes production capacity. Spot electrode prices in China in August were almost ten-fold higher compared to January.

Electrodes producers are not ready to meet the sudden surge in demand – the electrodes production cycle is 4-6 months, while capacity building requires up to two years and significant financial investment, Nechuyatov added. Moreover, there is a shortage of needle coke, the main input material for electrodes production.

“We are developing investment plans for the modernisation and expansion of production capacities, and we are implementing a programme to improve sales policies, pricing and interaction with customers,” Nechuyatov concluded.