A looming shortage of needle coke might constrain the supply of electrodes when the recession is over and steelmaking output fully recovers, according to coke and graphite electrode producer sources.

"Right now there are plenty of materials, but once the world returns to normal we will return to tight supply. A year ago it was in tight supply," said John Bassett, president of Seadrift Coke LP, Port Lavaca, Texas.

David Jardini, president of C/G Electrodes LLC, St. Marys, Pa., said the recession has masked the pending shortfall. "Steel mills stopped taking shipments and drew down on their four-month demand," with that figure now a year's worth of demand, he said, noting that his company has been running at about 35 percent of capacity.

Exacerbating the shortage of needle coke are rising crude oil prices, which have quadrupled needle coke costs since 2004. "In spite of the recession, needle coke prices rose 40 percent in 2008—another indication of how tight it...