The nation-wide lockdown announced by Indian government has impacted the Indian GE producers. SteelMint has heard from its reliable sources that both the graphite electrodes manufacturers in India, HEG Ltd and Graphite India (GIL) have suspended their operations amid 21-days nation lockdown that started on 24 March 2020.
The impact in domestic steel market
This closure of GE units is going to have limited impact on the Indian steel sector during the lockdown period as majority of EAF units have also suspended their operations following the lockdown order.
However, the key problem may arise in the form of GE shortage, when the domestic EAF producers will resume their operations after the situation normalises in the country.
According to the information with SteelMint, the steel units in India currently have limited GE inventory with only steel giants having majority share. Apart from this, the inventory with both the GE manufacturers are not very high amid the unpreparedness for such a pandemic situation.
Industry experts are of the opinion that while the GE manufacturers may supply electrodes for some days after the lockdown is lifted gradually, there may be electrodes shortage for few days of about 20-25 days till the time GE manufacturers completely resume their operations and are ready with the new stock. In this kind of situation, chances are high that Chinese electrodes may flood the Indian market giving tough competition to their Indian counterparts.
Is there threat from Chinese electrodes?
Before the lockdown happened, Indian HP grade electrodes prices were heard in the range of INR 120,000 – 125,000/MT whereas UHP grade 600mm electrodes were between INR 275,000 – 280,000/MT.
While China was having complete lockdown in the country between Jan-Mar’20 due to COVID-19, their electrodes exports to India declined giving Indian GE producers an opportunity to increase their domestic prices. Now with the production being resumed in China, chances are high that Chinese electrodes may once again influx the Indian market.
“Indian GE firms had increased electrodes prices for April delivery due to lesser shipment from major competitor, China. However, now amid the unexpected turn of events, the domestic producers will once again have to gear up to compete with cheap Chinese electrodes”, quoted a GE trader based in India.
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