Albukhary

Very good information, thank you very much.

2017-09-25 18:25

Henry Chan

should be 总共消耗了"960,000 MT" 的石墨电极, no?

2017-09-25 19:07

zefftan

You're welcome allbukhary

Henry: 960,000 is kg

2017-09-25 19:14

Henry Chan

320,000MT x 3 = 960,000MT ma, not meh?

2017-09-25 19:16

skywalker999

the most 2% of total cost only...

2017-09-25 19:18

zefftan

320,000 MT = 320,000,000 kg

Since every 1000 kg consumes 3kg

Hence, 320,000,000 kg / 1000 kg x 3kg
= 960,000 kg
= 960 MT

IF 960,000 MT, the cost wll be very high
Which means electrode alone also costing RM8billion orefi

2017-09-25 19:21

Henry Chan

Oh every 1000kg consumes 3kg :p thanks for correcting me out sir!

2017-09-25 19:24

zefftan

youre absolutely welcome sir

2017-09-25 19:53

myongcc5

Thanks for good write up! Well done!

2017-09-25 20:11

Rukawa

Good analysis!

2017-09-25 21:17

YLR33

very good info, thank you very much.
good news for those long masteel, ssteel & lionind

2017-09-25 21:18

tmooke

good info

2017-09-25 22:56

bursainvest12

Good analysis! Thanks

2017-09-25 23:40

windcloud

thanks for your info.

Just write some comments:
Electrodes got 3 types, normal, high and ultra high. Normal performance electodes is made from petroleum coke, high performance electrodes made from needle coke. For steel casting and making, normally at least need to use high performance electrodes that made from needle coke.

Electrodes price increased by about 7-10 fold, if by %, up to 700% since July price hike depend on diameter width.

If normal electrodes, this is about 150-220 or about 8% of the price.

But for steel industry (this need to use for high performance electrodes as for building construction purpose), so cost will be double to 300-440, about 16% of the price.

So if selling price is 2,600, cost will be 2,000 + 400 + 100 = 2,500, the margin will become 100. Please note that China steel price had been dropped a lot recently, so if steel price dropped to below 2,500, profit margin might be affected. Anyway, all need to follow Malaysia market price and individual company structure including finance cost, utility costs and others.

Anyway, just sharing and discussion purpose. If wrong, please rectify me.

2017-09-26 00:22

zefftan

Dear wind loud:

Thanks for the input

2017-09-26 00:51

Albukhary

Windloud, I think you calculation are incorrect.

As mentioned by Zefftan, the consumption of graphite electrodes is around 3kg per tonnes (actually the real consumption should be lower than 3kg, as most of EAF claim that their consumption of Graphite Electrodes is between 1.5kg - 2.1kg only).
That mean, 1 tonnes of graphite electrodes can produce minimum 333 tonnes and maximum 666 tonnes of steel.

Assume the current price of ultra high performance graphite electrodes is RMB110,000, so it will equivalent to RM70,000. Based on Zefftan calculation, the average Graphite Electrodes price for previous quarter was approximately RM12,000, that mean there is an increase of RM58,000 for current quarter.

If we take RM58,000 divided into 333 tonnes, then maximum impact to the cost is only RM175 per tonnes.

If we take RM58,000 divided into 666 tonnes, then maximum impact to the cost is only RM87 per tonnes.

So your assumption of cost will increase by RM300-440 is incorrect, it should be maximum RM175 only.

Please correct me if my basis of calculation is wrong.

2017-09-26 01:52

windcloud

Albukhary, username is windcloud, not windloud.

Normally consumption is around 2kg to 3kg for high performance electrodes.

If 2.5 kg, then 1 tonnes will produce 400 tonnes steel.

High performance granite price let's say RMB120,000 (let's say included tax/duty) x 0.64 = MYR 76,800, divided by MYR 192, is about 7-8% of the current price.

For 666 tonnes, the consumption will be 1.5kg of electrodes, but I wont use this, maybe Annjoo can achieve this but dont know is because of grades of electrodes and any other reason.

You are right, should not simply multiply by 2. Thanks for correct me.

2017-09-26 02:29

tealeaf

good sharing

2017-09-26 07:26

brushsoo

good sharing and informative!

2017-09-26 10:08