Graphite electrode pioneer, GrafTech, explains why its technology is indispensable to cleaner steel production worldwide
Since its inception in the 19th century, GrafTech has been dedicated to innovating in carbon and graphite – and, for well over a century, to finding solutions for steelmakers around the world. Today, the company stands as a global graphite electrode leader delivering highly engineered solutions that are key to reducing the environmental impact of the steelmaking process. As it celebrates its 140th year in business, Tim Flanagan, CEO and President, reflects on GrafTech’s journey and accomplishments.
“One hundred and forty years is quite a milestone, and we are proud of our history. Back in 1886, Coca-Cola was invented, Carl Benz patented the first car, and the Statue of Liberty was dedicated. It was in that same historic year that GrafTech’s predecessor, the National Carbon Company, was founded in Cleveland, Ohio, initially producing arc carbons for lightning – and going on to pioneer artificial graphite within a decade. The company went on to become Union Carbide, then UCAR and ultimately GrafTech. By the turn of the century, we had expanded into other carbon products like dry cell batteries, dynamos, motor brushes, carbon anodes, and, eventually, graphite electrodes, which remain the heart of our business today, serving the global steel industry,” he begins.
Innovation has always been a major part of the business, and the development of graphite technology is a defining part of its story. Reaching 140 years is a rare achievement for any company, and for GrafTech it comes down to one thing: making a product that is indispensable to the modern world. “The graphite electrodes we produce are the only commercially available product capable of carrying the electrical current required to melt scrap steel in an electric arc furnace (EAF): there is no substitute,” Tim continues. “That gives us the strength and structure to endure. Demand for what we make doesn’t disappear when the cycle turns – that is a durable foundation to build upon. In addition to that unique offering, staying close to our customers is key to our success. These are not off-the-shelf products; they are highly engineered solutions developed alongside steelmakers and furnace operators. That partnership model has carried us through the downturns severe enough to permanently remove capacity from this industry.”
The complexity of GrafTech’s core product is matched by the complexity of the supply chain behind it. Alexey Simushkin, Director of Marketing and Market Intelligence, explains what makes graphite electrodes so technically demanding to produce and so strategically significant to the steel industry. “Graphite electrodes are an essential consumable for EAF steelmaking, which is the process of remelting scrap steel rather than producing steel through the traditional blast furnace route using iron ore and coking coal. Approximately 80 to 90 percent of graphite electrode demand comes from EAF steelmaking, with the remainder coming from ladle furnaces and other ferrous and non-ferrous metal production. The electrode conducts the current that creates the arc to melt the scrap, and it is the only material capable of withstanding temperatures of up to 3000 degrees Celsius at the arc point. It is a very complex product that takes six months to manufacture but is consumed in just eight-to-ten hours inside an EAF.
“Notably, it is the only product in the steelmaking value chain that is derived from decant oil, an oil by-product, which is converted into needle coke, the main raw material for graphite electrode production. There is no viable substitute for needle coke if you want to achieve the UHP quality of electrode for EAF steelmaking, and the same raw material is also used in electric vehicle batteries and battery storage systems, which puts the steel industry in direct competition with the energy and battery sectors for supply. There are only five plants in the world capable of manufacturing needle coke outside of China. One of them is ours, located in Seadrift, Texas, and it is fully dedicated to the production of graphite electrodes, making us vertically integrated in a way that globally very few competitors are,” he reveals.
For GrafTech, being vertically integrated is not just a commercial advantage, rather, it is vital to its role in one of the most important transitions underway in heavy industry. EAF steelmaking generates approximately 75 percent less CO2 than the traditional blast furnace route, and without graphite electrodes, EAF steelmaking simply cannot happen. As Rodrigo Corbari, Vice President of Sales for the Americas, puts it: “We are deeply involved in the part of steelmaking that recycles steel back into steel. Recycling through the EAF uses graphite electrodes, and that is where we play our role, which matters enormously from a sustainability perspective. By supporting the shift towards EAF production, we are directly contributing to the steel industry’s ability to recycle steel and reduce the associated carbon emissions at scale.”
That contribution is often underappreciated. Graphite electrodes represent less than two percent of the overall cost of EAF steel production, yet without them the process cannot function and there is no viable alternative to melt steel in EAF. This is what makes GrafTech, in practical terms, a silent enabler of the greener steel transition. The company acts as a critical link in a decarbonization pathway that the US and Europe are already well advanced in pursuing.
Given its strategic importance, the current market dynamics around graphite electrodes are particularly concerning. In order to protect long-term supply of graphite electrodes, the market needs to value this material appropriately, which currently is not the case. Prices for graphite electrodes have been running below sustainable levels for several years, and according to Alexey, the industry is currently at an inflection point. “As a result, around 100,000 metric tonnes of UHP graphite electrode capacity outside China have been idled or shut down since 2022, leading to current capacity of approximately 660,000 metric tons. Meanwhile, there are many announcements of new EAF projects being built in the US and Europe, so demand is forecast to grow by around 15 percent by 2030, driven by new and existing furnace projects. The industry is moving from a balanced market towards a potentially significant imbalance, something we have seen before. In 2017 and 2018, prices moved more than ten times within a matter of months because the market became severely imbalanced and producers had already idled or closed capacity.
“This supply chain is complex and takes time. You cannot turn production back on overnight. If steelmakers continue to treat graphite electrodes as a commodity cost line rather than a strategic input, history suggests that a market imbalance can lead to significant price dislocation. Prolonged low prices make it very difficult for graphite electrode producers to reinvest and maintain the capacity the industry needs. To address this, we have increased our own R&D investment by more than 140 percent since 2019 precisely because we are committed to the long-term development of this product. At the same time, we are very bullish about the EAF growth and the decarbonization of the steel industry, so we want steelmakers to understand what is at stake in protecting the supply chain that makes all of that possible,” he concludes.
