A few years back, the steel industry noted a shorted of UHP graphite electrodes and, as expected, the lack of supply in the face of imminent demand drove the prices up to critical highs. Meanwhile, steelmakers tried to secure a steady source of UHP to avoid production holdups. Of course, not every steel producer was able to do so, and many some steel production was slowed or halted until producers could secure more UHP.
Reportedly, the panic led to UHP electrode prices peaking at up to $30,000 per tonne. However, prices have since fallen, although they remain high when compared to the historical cost of UHP. Meanwhile, the global demand for UHP is estimated at around 785,000 tonnes per year. This has kept steel producers on their toes, since the global demand is very near to the annual global production capacity of 800,000 tonnes.
While China is capable of producing approximately 50,000 tonnes on top of the above estimate (and perhaps even more if they lower the quality), the current state of UHP electrodes is still on the edge. Today, the supply and demand equation for UHP remains in a careful balance, which is a far cry from the state of the market some years ago.