The Political, Social and Economic Factors Impacting the Prices of Needle Coke

The latest prices of Needle Coke in China’s domestic market are USD 2240-2550/ tonnes. On the other hand, in Western Europe, prices vary around USD2750-2900/ tonnes. The needle coke prices are anticipated to rise during the projection period as crude oil prices are expected to remain high due to factors including the persisting Russia-Ukraine crisis, the unpredictability of the Iran nuclear deal and the political instability in Libya.

In the month of February 2022, the global prices of crude oil were impacted by the macroeconomic conditions worldwide, and they kept rising to new levels. The possibility of an upcoming recession leads to a dip in crude oil prices, leading to demand subduing. In Quarter 2, 2022, crude oil prices are projected to drop by 9% due to factors like demand-supply dynamics, recession uncertainties, and other factors.

The year-on-year price rise reached 27% from 2020 to 2021 in China due to an increase in demand and relaxation of limitations.

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Oil exports from Russia have reduced as the European Union implemented an embargo on crude oil imports from Russia effective 2022-year end. The ban interrupted 90% of Russian crude imports into the 27-nation region by 2022 end.

Needle coke growth has been sluggish. Though China possesses the bulk producing capability, which totals up to 1.1mn t/year based on petroleum and 1.03mn t/year of coal tar pitch-based capacity, while an average production totals to be about 50% of this volume.

Apart from China, the market is consolidated, and the significant market players are C-chemical, Phillip 66, Mitsubishi Chemical, and others. Phillip 66 is the prominent needle coke producing company in the UK and US that has the capacity to manufacture 400,000t per year.

However, the progress in demand still seems to overshadow the growth in supply which displays that the additional coking capacity that would provide an output of anode-grade coke that will ultimately be directed towards the production of needle-coke and graphite.

In spite of rising demand for Needle Coke, other factors like rising input prices and government ruling on emission control will likely define the price trend in the upcoming years.

The industry players focus on cutting out the intermediaries, and most manufacturers produce needle coke to produce lithium-ion batteries and graphite electrodes.

The demand for needle coke is increasing as it is employed in manufacturing steel. Need coke is the primary raw material utilised in making graphite electrodes that are further used to make steel.

The increasing demand for steel in various end-user industries will also result in high demand for needle coke. Also, the application of needle coke in other end-user industries, like nuclear furnaces, lithium-ion batteries, etc., is anticipated to lead the market’s growth during the forecast period.

According to Procurement Resource, the demand for needle coke is directly linked with the need for steel in several industrial applications. The commodity prices are likely to stay unstable and fluctuate due to several Political, Social and Economic factors. As crude oil is the critical raw material used to derive needle coke, the Russia-Ukraine unrest will dictate the market prices.