Needle Coke Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Needle Coke Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The needle coke market is valued at 1210 kilo tons in 2020 and is expected to register a CAGR of 12% during the forecast period (2021-2026).

The manufacturers of graphite electrodes, which are used in steel manufacturing through electric arc furnace, are facing a huge impact due to the COVID-19 pandemic owing to the declining prices and demand of electrodes. The evolving COVID-19 outbreak is, thus, impacting the steel manufacturers and also the raw material manufacturers of graphite electrodes, i.e., needle coke. The global steel industry is in a disastrous situation, far worse than anything experienced since the beginning of this millennium, with serious implications for domestic steelmakers. This time, the implications for the short-, medium-, and long-term are particularly negative.

Key Highlights

• Over the short term, the major factors driving the growth of the market studied are the growing demand for lithium-ion batteries​ and the rising availability of steel scrap in China.
• On the flipside, the impact of COVID-19 is acting as a roadblock to the growth of the market studied.
• An increase in lithium-ion battery production in Europe is likely to act as an opportunity for the market studied over the forecast period.
• Asia-Pacific region is expected to dominate the market and is also likely to witness the highest CAGR during the forecast period.

Key Market TrendsGraphite Electrodes Segment to Dominate the Market

• Needle coke is used as a primary raw material for graphite electrodes in electric furnace. It is a premium grade, high value petroleum coke used in the manufacturing of graphite electrodes of very low coefficient of thermal expansion (CTE) for the electric arc furnaces in the steel industry. When making the electrodes, it takes up to six months to make with processes, including baking and rebaking to convert the coke into graphite.
• Graphite has high thermal conductivity and is very resistant to heat and impact. It also has low electrical resistance, which is needed to conduct the large electrical currents necessary to melt iron, and thus can sustain sustaining the extremely high levels of heat generated in EAF (Electric Arc Furnace).
• Graphite electrodes are divided into 4 Types: RP Graphite electrodes, HP Graphite electrodes, SHP Graphite electrodes, and UHP Graphite electrodes.
• The Graphite electrodes are primarily used in the electric arc furnace steel manufacturing, alloy steel, various alloys, and nonmetals melting.
• These electrodes can provide high levels of generated heat, and they are also used in the refinement of steel and similar smelting processes.
• These graphite electrodes can melt iron scrap in an electric arc furnace at a temperature of about 1600℃.
• China is the both the largest manufacturer and consumer of the graphite electrode across the world. Over the past few years, graphite electrode witnessed a significant rise in prices .
• The COVID-19 outbreak has negatively affected the production of graphite electrode across the world and has caused major supply chain disruptions.
• The above-mentioned factors are likely to affect the demand for needle coke for graphite electrode application during the forecast period.

China - The Largest Producer and Consumer of Needle Coke

• Although China is the first country affected by the COVID-19 and its related lockdown, it is the first country that has come out of the lockdowns and is starting its long journey toward normalcy. However, as a major chunk of the Chinese economy is linked to foreign exports, where demand is still low will negatively affect the Chinese industry in the near future.
• China holds the largest share in terms of consumption and production capacity of graphite electrodes in the global scenario, thus, presenting the scope for the steel production in the country, thus, further displaying the demand in the needle coke market during the forecast period.
• Chinese manufacturers rushed to install capacity for graphite electrodes from the time the country began to commit heavily to higher rates of steel production via electric arc furnace in 2017. The capacities of electric arc furnaces have increased in recent times, with an increase of nearly 70 million metric ton in 2019. In addition to it, the Government of China is also focusing on developing eco-friendly means of producing steel. Several hundred thousand metric ton of new capacity of electric arc furnace is already in the pipeline. Currently, about 20% of the steel is produced from electric arc furnaces in the country.
• Till November 2020, China produced around 961.16 million ton compared to 911.04 million ton during the same period last year. Whereas the steel production in other countries suffered due to the virus outbreak but the production in China grew by 5.5% till November 2020.
• China is one of the largest consumers as well as the importer of needle coke, because of its higher graphite electrode manufacturing capacities and vast market. The graphite electrode manufacturers are mainly focused on the production of UHP graphite electrodes for steel manufacturing, thereby, propelling the market for needle coke during the forecast period. China is the largest steel manufacturing country in the world.
• In 2019, China produced around 996.3 million ton of steel compared to the total global steel production of 1868.8 million ton which is more than 50% of the global steel production. China is the single largest producer of lithium-ion batteries in the world. In 2019, the was more than 316 gigawatt-hours (GWh) of global lithium battery manufacturing capacity. China is estimated to hold more than 70% of this capacity indicating the country occupying a significant share of the demand for the needle coke. The newly installed capacities of batteries reached 5.9 GWh till October 2020.
• The growing demand for graphite electrodes and lithium-ion batteries is expected to drive the market during the forecast period. The COVID-19 pandemic presented a problematic situation in the production of graphite electrodes and lithium-ion batteries in the country earlier in the year. However, the conditions are better now, which has strengthened the probability of market recovery over the forecast period.

Competitive Landscape

The needle coke market stands to be a consolidated market, and the top 7 players accounted for over 48% of the global production capacity in 2020. While the market had been highly concentrated till 2018, with numerous capacity additions observed in 2019 and 2020 (majorly in the Chinese market), the market shares held by major players in the global market also witnessed noteworthy adjustments. Some of the major players in the market include Phillips 66 Company, Shandong Jingyang Technology Co. Ltd, C-Chem CO., Ltd., Shanxi Hongte Coal Chemical Co., Ltd., and Shandong Yida Rongtong Trading Co. Ltd, among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Baosteel Group
C
Chem Co., Ltd.
China National Petroleum Corporation
ENEOS Corporation
Kaifeng Pingmei New Carbon Material Technology Co. Ltd (KFCC)
Mitsubishi Chemical Corporation
Phillips 66 Company
PMS Tech (a joint venture of POSCO Chemtech and Mitsubishi Chemical)
Seadrift Coke L.P. (GrafTech International)
Shandong Jing Yang Technology Co. Ltd
Shandong Yida Rongtong Trading Co. Ltd
Shanxi Hongte Coal Chemical Co. Ltd
Sinosteel Corporation

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