SteelMint has heard from its market sources that the Graphite electrodes (GE) producers in India are likely to lower down their GE prices (especially higher size) for the upcoming quarter of Jan-Mar’19. The price for UHP grade GE of size 600mm is likely to be around INR 950,000 per tonne (USD 13,582/MT) against INR 1,100,000/MT in the ongoing quarter of Oct-Dec’18.
The reason that can be attributed to the likely plunge in Indian GE prices is an ongoing downtrend in China’s GE offers since the start of winter heating season from mid-November. During this season (Nov-Mar), the steel demand in China takes a backseat and country also imposes production cuts in steel sector which indirectly affects the GE demand (which is a key raw material for steel production via electric furnace route).
Now as India has removed anti-dumping duty on GE imports from China in the month of August this year there are chances that the Chinese GE may enter Indian circuit. Thus, Indian producers have to consider the ongoing trend of GE prices in the Chinese market while fixing their price for Jan quarter. The current GE prices (size 600mm UHP grade) are heard to be in the range of RMB 90,000 to 105,000/MT (USD 13,000 – 15,200/MT).
Although GE prices in India may fall for the upcoming quarter, a very dramatic plunge in the prices is unlikely given high needle coke prices which is a key raw material for GE. India is majorly dependent upon imports from U.S. to meet its needle coke requirements and the supply of good quality needle coke used by Indian GE manufacturers still remain tight as there is no major expansion or capacity addition that is coming up in this industry.
As per the market experts, the domestic graphite electrodes demand in India is likely to increase in the long run amid consolidation in the Indian steel industry where a couple of large steel plants has already been acquired by the existing large steel industry players. These large players are likely to ramp up their production in the immediate future which will push demand for GE.
The Indian GE market is dominated by two key players, HEG Ltd and Graphite India and these two players have been highly benefited with the upheaval in GE industry since latter half of 2017. The respective capacity of these two companies are 80,000 tonnes and 98,000 tonnes. However, HEG Ltd has recently announced that it is set to add about 20,000 tonnes of additional capacity by 2021.
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