Japan Electrode Price Reaches Historic High in F2009

Japanese electrode makers and steel makers almost finished price negotiation for fiscal 2009 started in April. Electrode makers’ domestic selling price reached record high. The new price surged by about 40% from fiscal 2008 and reached around 700,000 per tonne for standard size in 14-24 inches diameter. The price has increased for 5 consecutive years along cost up of needle coke on the contrary to price down of other substantial materials such as ferroalloy and ferrous scrap. Steel makers’ production cost will largely increase by higher electrode price, especially for electric furnace steel makers.

At the beginning of this year, electrode makers such as Tokai Carbon and Showa Denko announced they raise electrode price to over 750,000 yen per tonne for fiscal 2009. The background was that Japanese needle coke makers increased their selling price by 70% to around $ 2,500 per tonne for 2009 from 2008.

Domestic electrode price hit the bottom at 270,000 yen per tonne in fiscal 2002 and kept low for 3 years. The price almost doubled to around 500,000 yen during fiscal 2005-2008 when emrging countries such as China increased the purchase of electrode.

Some steel makers are still in price negotiation with electrode makers. Their negotiations are expected to be concluded within this month.

A source of Japanese electric furnace steel maker said electric furnaces are trying to cut costs by 100 yen per tonne. They will be forced severer cost reduction due to high electrode price.