Report

PSA Materials: Graphite Electrode Market – Hopes for Higher Graphite Prices, Amid Industry Restructuring

Graphite Electrode Market – Hopes for Higher Graphite Prices, Amid Industry Restructuring
Tags: Showa Denko (4004), SGL Carbon SE (SGL GY), Tokai Carbon (5301), Nippon Carbon (5302), SEC Carbon (5304), Tokyo Steel (5423)

  • Buying carbon stocks and selling electric arc furnace (EAF) steel makers would have been an effective pair trade on Sept 28th. Shares in Showa Denko (SDK, 4004), Tokai Carbon (5301) and
  • Nippon Carbon (5302) saw sharp gains, and even SEC Carbon (5304) followed along as a laggard.
  • The likely catalyst for these moves was the confirmation that SDK had received approval to complete its acquisition of the SGL Carbon SE (SGL GY) graphite electrode (GE) business.
  • In addition, however, the GE companies rose as a broker put out a positive view based on improving pricing leverage.
  • In this note we provide a chart showing the price of US carbon and graphite electrodes for electric furnaces.
  • Concerns on rising raw material costs suggests an optimistic outlook may be premature.
Provider
Pelham Smithers Associates Ltd
Pelham Smithers Associates Ltd

Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods. 

PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries. 

The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012. 

Analysts
Joel Scheiman

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