COVID-19 Impact on Needle Coke in Chemical and Materials Industry

COVID-19 Impact on Needle Coke in Chemical and Materials Industry

  • Chemical and Materials
  • Dec 15, 2020

COVID-19 on Needle Coke in Chemical and Materials Industry

INTRODUCTION

Needle cokes are main primary materials which is used for electric steel furnace. In steel market, every manufacturer has expected the crises which will occur due to the pandemic situations caused by the COVID-19 in the steel market globally but COVID-19 has the mixed situation of patterns for the needle cokes manufacturers in developing countries. The demand of needle coke has been declined due to lock down in the several regions due to which manufacturing sector have been affected on the larger extend. The impact of COVID-19 on the needle coke manufacturers can be seen with the product portfolios which are offered by manufacturers in the global steel market.

Needle coke is a superior grade of petroleum coke which is used to manufacture graphite electrodes. Graphite electrodes are used in electric arc furnace which is used in to refining steel in ladle furnaces.

Types of graphite electrodes are:

  • RP graphite electrodes
  • HP graphite electrodes
  • SHP graphite electrodes
  • UHP graphite electrodes

Application area of graphite electrodes:

  • Furnace design
  • Scrape requirements
  • Charging practice
  • Burner/oxygen usage
  • Water spray rings
  • Fume control system
  • Meltdown/refine/tap-to-tap time
  • Power steel
  • Slag practice

IMPACT OF COVID-19 ON NEEDLE COKE INDUSTRY

As there are more producers of graphite electrodes in China and India, the leading producers face several problems due to lower demand for graphite electrodes in developing countries. The movement of goods has become very difficult in the pandemic situation of import and export, even as demand has decreased due to a decline in the prices of needle coke. Developing countries have also faced the problem of storing graphite electrodes with lower demand leading to higher demand for storage space which raises the cost of production leading to a decrease in the global steel industry.

Manufacturers also face the problem of manufacturing graphite electrodes according to the market demand because of the fact that manufacturers are unable to generate revenue during COVID-19. During COVID-19, the market for graphite electrodes in the large finished product industries dropped as the demand for graphite electrodes decreased. Several manufacturing sectors were on hold and many industries were also operating at approximately 40 percent-50 percent of their current capacity due to decreasing consumer demand for finished goods.

COVID-19 have created several challenges for the graphite electrodes manufacturers in operation and customer satisfaction of the products and also movement of stock is highly dependent on contract labourers who are currently unavailable due to government regulation in the COVID-19 due to which the demand of all types of the graphite electrodes such as RP graphite electrodes, HP graphite electrodes, SHP graphite electrodes and UHP graphite electrodes have fallen down. COVID-19 have affected the steel industry in all the regions due to which demand of the graphite electrodes have fallen down.As due to the COVID-19 disruptions in the supply chain can be seen which decreases the demand for the polyurethane and ultimately created an impact on different industries. The pandemic will hamper the growth of needle coke in steel industry. Steel is widely used in various industries.

COVID-19 had the greatest impact on the supply chain as it became difficult to import and export from different countries due to the lockdown in several countries and also lower the demand which has affected the market demand for needle coke products. Many plant implementation has gone on hold as the market in developing countries has a much lower demand for graphite electrodes. Transportingof steel from one industry to another is very difficult because the demand for needle coke used in several processes for the production of steel goods has decreased and has affected the polyurethane industry worldwide.

For instance,

  • In December 2019, the appearance of coronavirus in China and gradual expansion of the epidemic drastically brought down the demand of the polyols. The price of steel products have fallen down to negative because of the lower demand in the market and less availability of storage of the polyurethane products which was manufactured from polyols. Lockdown is in force in Italy, Germany, India, the U.K., South Africa, Morocco and Spain. Coronavirus driven lockdowns call for people to “stay at home” and avoid unnecessary travels.

COMPANIES STRATEGIC INITIATIVES DURING COVID-19

  • In July 2020, BASF SE has manufactured and also donated 4 metric tons of Ultramid B24 N-polymers to Ahmedabad Textile Industry’s Research Association (ATIRA) which helps to produce personal protective equipment (PPE) for the Indian medical fraternity. The step taken by the BASF SE also helps the Indian government to fight against COVID-19 situation.
  • In July 2020, BASF SE donated Rs 31.20 million to Indian government. The fund also helps Indian people to fight against the novel cronavirus. The donation has helped to create a market image in the Indian market.
  • In June 2020, Corning Incorporated has supported the Indian government in COVID-19 situation. The company donated pulse oximeters, infrared thermometers and PPE kits for public health and also 1 lakh unit’s co vitamin C tablets for 5000 policemen in Chakan, Pune.
  • In April 2020, EPM group take a initiative to protect employees in COVID-19 situation. They implement health tips for the employees which will help to protect from pandemic situation. EPM group measure body temperature for all employees during the working shift which shows the company’s efforts towards their employees. These health tips help to create an image of the company in the market.

Another aspect of manufacturers which they have realised is their over-reliance on one supplier, the time for companies to start searching for alternative suppliers, mostly local suppliers to avoid any further risk and to be prepared in the future for any such crises. While it's not certain when companies will be on track, there will be a demand crunch for raw materials whenever they will. Everyone is going to rush to get raw materials,

CONCLUSION

The spread of the novel coronavirus today has caused significant market damage throughout the globe. Most of the companies have been stopped immediately and the impact of the coronavirus pandemic on sugar production is not yet clear. The towns are closed down and a modern norm has become of social distancing. Government along with the private sector can play a vital role in reviving the sector. The government is attending the large financing needs arising from COVID-19, the private sector can take care of large investments and expertise required for the power sector in developing countries. Apart from this, strong engagement with governments and local stakeholders will continue to contribute significantly to the development of the sector.

Due to heavy losses, several producers closed the factory. The companies are taking strategic measures to increase the market's demand for the needle coke and to raise the price in order to earn revenue and government is also helping manufacturers by implementing policies that help manufacturers to maintain stability. After the lock down, the manufacturing sector will increase on the pace which will help the industrial lubricant growth in near future.

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