Market evolution: Graphite electrodes for furnaces (CN 854511) — 2015–2025

Introduction

Graphite electrodes are a critical industrial input for electric arc furnace (EAF) steelmaking, and their trade patterns reflect both cyclical commodity dynamics and deeper structural shifts in European industry and geopolitics. This report examines EU trade in CN 854511 — electrodes of graphite or other carbon, for electric furnaces — over the period 2015 to 2025, drawing on trade overview data.

Over the decade, the EU remained a consistent net exporter of graphite electrodes. However, the market was profoundly shaped by three main dynamics: an extraordinary price spike in 2018 driven by a raw-material supply shock originating in China; a structural decline in EU production volumes accompanied by a paradoxical rise in export orientation; and a sweeping geopolitical realignment of trade partners, most notably the near-total collapse of trade with Russia and a dramatic reorientation of import sources. The following sections analyse each of these dynamics in turn.

1. The 2018 Needle Coke Crisis: A Watershed Moment for Graphite Electrode Markets

The most dramatic event in the 2015–2025 period was the explosive price spike of 2018, which reshaped both the value and volume trajectories of EU graphite electrode trade for years to come.

An unprecedented surge in export and import prices

In 2015, the EU's average export price stood at €1,948 per tonne and the average import price at €2,029 per tonne. By the peak year, export prices had surged to an extraordinary €4,113 per tonne, while import prices spiked even more dramatically to a maximum of €9,522 per tonne — nearly five times the starting level. This price explosion was driven by a global shortage of needle coke, the key raw material for graphite electrodes, triggered by China's aggressive environmental enforcement campaign in 2017–2018, which curtailed coal-based needle coke production across the country.

EU export values reached record highs despite constrained volumes

The price surge propelled EU export values to a peak of €1,089 million — more than three times the 2015 level of €354 million — even though export volumes peaked at a more modest 288,752 tonnes (compared to 181,768 tonnes in 2015). Import values similarly surged to a maximum of €669 million, overwhelmingly driven by price rather than volume, as import quantities peaked at only 80,574 tonnes in 2015 and subsequently declined.

Price shocks were concentrated in specific trade relationships

Shock detection analysis reveals that the 2018 crisis was felt unevenly across trading partners:

The most extreme import-side shock came from India, where unit prices surged by 537% in a single year, reflecting India's own role as a major graphite electrode producer competing for scarce needle coke. On the export side, EU electrode shipments to Norway and South Africa saw price jumps of 211% and 94%, respectively, as global buyers bid up prices.

The post-2018 normalisation brought prices back below pre-crisis levels

After the spike, prices corrected sharply. By 2025, EU export prices had fallen to €1,455 per tonne — actually 25% below the 2015 starting level, and barely a third of the 2018 peak. Import prices, while also declining from their peak, settled at €2,365 per tonne — still 17% above the 2015 level. This asymmetry suggests that EU producers faced a lasting squeeze: export price erosion exceeded the benefit of lower input costs, while import competition remained priced at a premium, possibly reflecting differentiated product quality or supplier market power.

2. Declining Production Volumes, Rising Export Orientation: The EU Industry's Structural Paradox

Beneath the cyclical price volatility lies a more fundamental structural shift: EU production of graphite electrodes contracted sharply over the decade, even as the industry became more export-oriented than ever before.

EU production volumes fell by more than half

According to production data, EU production of graphite electrodes declined from 638,535 tonnes in 2015 to 280,000 tonnes in 2025 — a contraction of 56%. Production value fell more modestly, from €645 million to €600 million (−7%), suggesting that the remaining production shifted toward higher-value products or that unit revenues improved. However, the peak production value of €1,490 million (coinciding with the 2018 price spike) was never approached again.

The EU's trade surplus widened despite lower output

The EU maintained a positive trade balance throughout the period, actually improving from €191 million in 2015 to €210 million in 2025 (+10%). This occurred because import values fell even faster than export values (−35% versus −11%), reflecting a steeper decline in import volumes (−44%) compared to the 20% increase in export volumes. The EU's net import reliance deepened from −33% to −110%, meaning the EU became significantly more of a net exporter relative to its domestic market.

Export propensity surged as producers pivoted to international markets

Two vulnerability indicators capture this structural reorientation:

Export propensity — the share of EU production destined for non-EU markets — rose from 42% to 69%, indicating that EU producers increasingly depend on external demand. This shift may reflect weaker domestic demand (e.g., from EU steelmakers transitioning away from EAF or reducing capacity) or a strategic reorientation toward higher-margin export markets.

Specialisation is concentrated in Spain, Slovakia, and France

Specialisation data for 2025 shows that EU production is geographically concentrated:

Spain and Slovakia show the highest revealed comparative advantage (RCA > 6), while Germany, despite holding 16% of EU production, shows a negative RSCA, indicating it is a net importer relative to its overall trade profile. This concentration implies that supply disruptions in a few key member states could have outsized effects on EU export capacity.

3. From Russia to India: The Geopolitical Reshaping of EU Electrode Trade Flows

The decade saw a profound reconfiguration of the EU's graphite electrode trading partners, driven by geopolitical events, sanctions regimes, and shifting competitive dynamics.

Russia's near-total elimination as an EU export market

The most striking geopolitical shift was the collapse of EU exports to Russia, which fell from €61 million in 2015 to essentially zero (€443) in 2025 — a decline of 100%. Russia was the EU's third-largest export market in 2015; by 2025, it had vanished entirely from the trade picture. This reflects the impact of EU sanctions imposed following Russia's invasion of Ukraine in February 2022, which progressively restricted industrial exports. The volatility data shows a coefficient of variation of 0.40 for exports to Russia, reflecting the abruptness of this collapse rather than gradual fluctuation.

Iceland and Turkey emerged as the EU's dominant export destinations

With Russia's departure, export flows reoriented toward two key partners:

Iceland's demand is closely linked to its aluminium smelting industry (which uses EAFs and related carbon products), and the doubling of EU electrode exports to Iceland suggests deepening industrial integration. Turkey's growth reflects its expanding EAF-based steel sector, while the US market also grew steadily.

China and India dominate EU imports, but with diverging trajectories

On the import side, two Asian suppliers dominated — but in opposite directions:

China remained the EU's largest single import source but saw its share contract by a third. India more than doubled its sales to the EU, likely benefiting from its growing production capacity and cost competitiveness. Ukraine's remarkable growth (+566%) is noteworthy given the country's wartime conditions, possibly reflecting the EU's strategic effort to support Ukrainian exports and diversify supply chains. Meanwhile, the United States saw its exports to the EU collapse by 94%, from €24.5 million to just €1.4 million — a reversal that may reflect changing US domestic demand or shifts in global electrode flows.

Trade concentration increased on both sides

Herfindahl-Hirschman Index (HHI) data reveals growing concentration in both import and export markets:

Import concentration was already high in 2015 (above the 2,500 threshold typically considered "highly concentrated") and intensified further. Export concentration doubled, rising from a moderate level to one approaching the high-concentration threshold. This suggests that the loss of diversified Russian export flows and the growing weight of a few key destinations (Iceland, Turkey) have made EU export revenue more dependent on a smaller number of markets — a potential vulnerability.

Conclusion

The EU graphite electrode market over 2015–2025 was shaped by three interlocking dynamics. First, the 2018 needle coke crisis produced an extraordinary but temporary price spike, whose after-effects contributed to a long-term decline in unit export prices below pre-crisis levels. Second, EU production volumes contracted by more than half, yet the industry paradoxically became more export-oriented, with export propensity rising to 69% and the trade surplus widening — a pattern consistent with weakening domestic demand or strategic market repositioning. Third, geopolitical upheaval — principally EU sanctions on Russia and shifting competitive dynamics in Asia — dramatically reshaped the map of EU trade partners, replacing diversified flows with a more concentrated structure centred on a handful of key markets.

Looking forward, the key risks for the EU's graphite electrode sector include over-reliance on a small number of export destinations, vulnerability to supply shocks from concentrated import sources (China and India together dominate), and the structural question of whether declining domestic production can sustainably support a growing export orientation. The vulnerability indicators suggest that the EU industry's exposure to external market conditions is now considerably greater than it was a decade ago.