Needle Coke Market Trends

Growth Drivers

• Growth in electric arc furnace steelmaking: Growth in electric arc furnace (EAF) steelmaking strongly drives the needle coke market because needle coke is the key raw material for graphite electrodes, which are essential to EAF operations. As more steelmakers shift from traditional blast furnaces to EAFs for environmental and efficiency reasons, demand for graphite electrodes and, therefore, needle coke increases. In 2024, EAFs accounted for about 29 % of global crude steel production, up from previous years, reflecting this ongoing transition in the industry. Every ton of steel produced in an EAF requires roughly 2.0–2.5 kg of graphite electrodes, with ultra-high-power electrodes becoming increasingly preferred for modern furnaces. As EAF capacity expands globally with hundreds of EAF units in operation and new capacity under development, the consumption of needle coke for electrode manufacture rises in tandem. This trend is reinforced by industry decarbonization goals that favor EAF steelmaking for its lower carbon footprint and greater scrap utilization, making it a key driver of needle coke market growth.
• Rapid industrialization and infrastructure development: As emerging economies expand their construction of highways, rail networks, bridges, and urban buildings, overall steel consumption rises, leading steel producers to increase production capacity. Graphite electrodes are essential for electric arc furnace (EAF) steelmaking, a method increasingly adopted for its energy efficiency and lower emissions, and this process relies on high-quality needle coke as a feedstock. Infrastructure-led economic growth in regions such as the Asia-Pacific has supported higher steel output and electrode demand, accounting for a large share of needle coke use. As global steel production continues its upward trend alongside expanding industrial bases, needle coke consumption for steelmaking applications is expected to grow in alignment with these broader development patterns.
• Technological advancements: Modern refining and coking technologies, such as optimized delayed coking, hydrocracking, and advanced feedstock preprocessing, allow producers to yield needle coke with higher carbon content, lower sulfur and ash levels, and more uniform microstructures, meeting the stringent specifications of both graphite electrode and battery anode manufacturers. Automation, real-time monitoring, and sophisticated process controls help reduce production variability and energy use while boosting overall output efficiency. These innovations also support the development of premium and specialty needle coke grades, broadening their use in emerging applications like high-performance batteries and advanced materials. As producers invest in R&D and modernized plants, the market benefits from greater product consistency and the ability to meet rapidly evolving end-use requirements.

Challenges

• Raw material price volatility: The prices of the raw materials vary greatly, which is creating a barrier to the adoption of needle coke. Coal tar and decant oil contribute significantly to the production cost. The prices of coal and crude oil are sensitive and fluctuate often, resulting in price hikes. Producers are considering waste-derived alternatives that will reduce the dependency on these fluctuating-priced raw materials. The strategic sourcing is enhancing the long-term competitiveness of the manufacturers as the prices of needle coke are reduced.
• High energy intensity: The calcination and graphitization of needle coke requires high temperature, which increases the energy costs substantially, resulting in higher costs for the producers. The rising control of the government over the stringent environmental concerns has limited producers from using electricity sustainably, which is further pressuring them to maintain energy-efficient manufacturing, increasing the cost of the businesses. Governments are globally pressuring manufacturers to limit electricity and adopt natural sources of power to conserve electricity and reduce reliance on fossil fuels.