Resonac

HARNESSING THE POWER OF CHEMISTRY

HARNESSING THE POWER OF CHEMISTRY

Speaking to Tim Saxon, Chief Marketing Officer for Resonac Graphite, we learn about the vital role of graphite electrodes in the production of steel, and how the company is shifting in a more environmentally conscious industry.

Can you briefly describe your business and how you support Makstil?

Resonac Graphite (Resonac), formerly known as Showa Denko Carbon, manufactures ultra-high power (UHP) graphite electrodes which are critical components used in the remelting of steel scrap. To produce its steel plates and slabs, Makstil owns and operates an electric arc furnace (EAF). When using an EAF to produce steel, a high-powered electric arc is used to melt and recycle steel scrap into new steel. The electricity used to melt the scrap is transferred solely through the graphite electrode. In 2022, approximately 30 percent of the world’s steel (or approximately 565.5 million metric tonnes) was produced via EAFs – making steel the most recycled material in the world.1

As of 1st January, 2023, Showa Denko Carbon officially became Resonac Graphite BU. Why the change?

We like to say, “New look. Same values.” Showa Denko Carbon has a very strong name in the global steel industry, but our parent corporation has undergone a substantial transition over the past three years. In 2023, after acquiring and completing the integration of Hitachi Chemicals, the Showa Denko Group officially became Resonac – a company whose mission is to change society through the power of chemistry. The name “Resonac” was chosen to convey the desire to RESONATE with Chemistry. Much like our business unit which

literally transforms carbon into graphite, we recognise that the world is also undergoing fundamental change. As a global community, we must place a priority on sustainability and responsibility, recognising our obligation to future generations. We know our purpose is not just to simply manufacture and sell a product. As a business unit and corporation, it is Resonac’s responsibility to co-create innovative technologies and services with partners inside and outside of our business. With these synergies, we want our combined solutions to be more than just the sum of its parts. Fortunately, the “new” steel industry provides a multitude of opportunities for co-creation.

Speaking of increased focus on sustainability in manufacturing, how do you see your business changing?

The increased focus on sustainability and environmental stewardship is having a meaningful impact on the graphite electrode industry. As mentioned earlier, recycling steel via EAF only accounts for approximately 30 percent of the world’s production, but that method of production also results in approximately 75 percent less carbon emissions than other methods of steelmaking. 2 As more steelmakers focus on sustainability, the industry is seeing a considerable increase in the construction of electric arc furnaces, which will significantly increase the demand for graphite electrodes.

Given that, how does Resonac plan to address those issues?

The graphite electrode industry, much like the steel industry, is a cyclical one. Both industries also require significant capital investment and face major threats from offshore competition – particularly by government-subsidised producers who are not required to adhere to safety or sustainability standards.

Despite these threats, Resonac has a very strong history of investment in the global EAF steelmaking industry. The company (then Showa Denko) produced its first graphite electrode in Omachi, Japan more

than 85 years ago. Over the next several decades, Resonac grew the graphite electrode business as the EAF steel industry grew. In 1988, it purchased the Ridgeville, South Carolina facility in the US, and in 2017, purchased the A Coruña Spain, Steeg Austria and Banting Malaysia facilities from SGL Carbon. Resonac is now the world’s largest manufacturer of UHP graphite electrodes with plants strategically located to meet regional demand with regional supply.

Our most recent and perhaps most exciting investment, is the acquisition of Automation (AMI), which was announced in June 2023. AMI is an industry leader in providing innovative process control and automation technology that improves customer operating efficiency. AMI’s Meltshop Division is at the forefront of EAF automation and optimisation and has the largest group of EAF specialists in the world. The Industrial Systems Division is a prominent supplier of customised automation and power control systems for steel, paper, cement, oil and gas, transportation, and mining.

As an industry leader and vital part of the EAF steelmaking supply chain, Resonac is in a unique position to use our innovative technologies, our products, and our services to help in the transition from traditional methods of steelmaking to new, safer, cleaner, more efficient, and more flexible production. While we understand that business philosophies and practices are ever-changing, we are happy that we have ongoing projects and co-creative efforts with various partners around the world.

Does this include Makstil?

Yes, of course! While both companies historically maintained a very professional “buyer/seller”

Tim Saxon, Chief Marketing Officer for Resonac Graphite

relationship in the past, Resonac’s strong partnership with Makstil was solidified during the most extensive graphite electrode crisis to date. In late 2017, after years of (ex-China) graphite electrode production rationalisation, the Chinese Blue-Sky Initiative forced the immediate stoppage of approximately 40 percent of its graphite electrode capacity.3 Almost instantly, global EAF steelmakers were left without a way to melt the steel they were dependent on producing for their survival. Even if available, prices for electrodes increased by approximately 10 times in three months, which turned out to be a small price to pay for the ability to produce product and fill customer commitments.

Needless to say, the crisis found different suppliers and different consumers negotiating various, creative ways to withstand the predicament and keep the electrode supply lines open. Some of those solutions turned out to be less advantageous in the longer term, but proved necessary for the survival of several steel businesses.

During this tumultuous time, Resonac worked diligently to develop true “win-win” partnerships that will ensure our industry not only survives… but thrives during the next crisis. The framework of these partnerships was the foundation for Resonac’s Volume Supply Partnership (VSP), which was recently renewed by Maksil, as well as our Strategic Supply Partnership (SSP). We are now excited to start “co-creating” with selected partners on a new

Optimisation Supply Partnership (OSP), but more to come on that endeavour.

Makstil has discussed some projects and ambitious plans for continued diversification and expansion in the coming years, so you are confident Resonac can help them achieve their goals?

Absolutely. Although names can change, a company’s purpose and legacy lie in its DNA. At Resonac Graphite, supporting our partners in the electric steelmaking industry is exactly what we do.

1 World Steel Association (worldsteel.org)

2 Steel Manufactures Association (steelnet.org)

3 Industry estimates