Electrode shortage affects steel industry

Electrode shortage affects steel industry
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Tight electrode supply and elevated pricing could reduce steel production and increase mill costs, according to Hector Forster, senior editor at S&P Global Platts.

In his “The Barrel Blog” post dated Oct. 17, 2017, Forster writes that spot electrode pricing has increased tenfold in some cases. A reduction in steel output related to shortage of the raw material is “a real fear,” he adds. 

The shortage stems in part from Chinese coal mines being shut or idled for environmental and safety-related reasons and from the impact of Hurricane Harvey on the U.S. Gulf Coast. These situations have affected petroleum coke output used in needle coke, which goes into the electrodes, Forster writes.

Merchant pig iron and direct-reduced iron (DRI) or hot-briquetted iron (HBI) may benefit as a result of the shortage, he says.

U.S. pig iron imports are the highest they have been since the financial crisis of 2007-08, Forster notes, and Russia and the Ukraine are now the largest seaborne pig iron suppliers, supplanting Brazil.

“The broad market consensus seems to be that electric arc furnace (EAF) mills which charge scrap and metallics are affected more due to demand for larger electrodes produced via needle coke from petcoke,” he writes.

“Smaller and medium-sized EAF furnaces may make do with smaller electrodes from coal-based needle coke,” Forster adds.

The post quotes Clinton, Pennsylvania-based Continuous Improvement Experts Managing Partner Jeremy Jones as saying smaller EAF producers rely more on electrodes from the spot market and not long-term contractual supply, and spot prices have risen.

According to Jones, ferrous scrap charged with pig iron and DRI/HBI can allow for reduced electrode consumption, but the results can be variable.

“Iron ore and scrap prices falling in September and electrode shortages gaining prominence, a holiday early October in China prevented bigger trade flow in markets such as pig iron and billets, traders said last week,” Forster writes. “The market may reach deadlock for a further few weeks, a pig iron trader said.”

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Source: Recycling Today
Electrode shortage affects steel industry
<![CDATA[Tight electrode supply and elevated pricing could reduce steel production and increase mill costs, according to Hector Forster, senior editor at S&P Global Platts. In his “The Barrel Blog” post dated Oct. 17, 2017, Forster writes that spot electrode pricing has increased tenfold in some cases. A reduction in steel output related to shortage of the raw material is “a real fear,” he adds.  The shortage stems in part from Chinese coal mines being shut or idled for environmental and safety-related reasons and from the impact of Hurricane Harvey on the U.S. Gulf Coast. These situations have affected petroleum coke output used in needle coke, which goes into the electrodes, Forster writes. Merchant pig iron and direct-reduced iron (DRI) or hot-briquetted iron (HBI) may benefit as a result of the shortage, he says. U.S. pig iron imports are the highest they have been since the financial crisis of 2007-08, Forster notes, and Russia and the Ukraine are now the largest seaborne pig iron suppliers, supplanting Brazil. “The broad market consensus seems to be that electric arc furnace (EAF) mills which charge scrap and metallics are affected more due to demand for larger electrodes produced via needle coke from petcoke,” he writes.…