Rising Graphite Electrode Prices Driven by Raw Material Costs
The ongoing increase in graphite electrode prices throughout 2026 is primarily a result of rising production costs rather than a surge in market demand.
The graphite electrode market in 2026 has experienced a pattern of 'passive' price increases, driven by surging raw material prices rather than market growth. With needle coke accounting for approximately 60% of production costs, the volatility in international oil prices—exacerbated by geopolitical tensions—has significantly raised the baseline cost for manufacturers.
Data from the industry indicates that corporate profitability remains under pressure. In March 2026, the sector recorded average losses of 2,548 yuan per ton, highlighting that electrode price hikes have failed to fully offset the increased costs of inputs like low-sulfur petroleum coke. This dynamic underscores a period of severe margin compression for producers.
On the demand side, recovery has been marginal. While electric arc furnace operating rates in China saw a post-holiday rebound, the limited profitability of steel mills has kept procurement volumes constrained. Furthermore, export performance has suffered due to logistics disruptions in the Middle East, leading to a significant year-on-year drop in total export volumes during the first quarter.
By October 2026, market volatility began to subside as raw material supply chains stabilized. This transition suggests that in the absence of acute cost-push factors, underlying demand remains insufficient to support further price appreciation, leading the industry into a phase of consolidation.