India’s domestic graphite electrodes prices have remained stable over the past two months since the lockdown was announced in the country.
The UHP grade 600mm electrodes are heard to be in the range of INR 275,000 – 280,000/MT whereas HP grade 450mm is reported to be around INR 120,000 – 125,000/MT.
SteelMint learned from its sources, that although the big EAF mills such as JSPL, JSW, JSL, Essar, and Tata BSL have resumed operations, the smaller players which make up half of India’s steel melting capacity, are unable to do so because of disruption in transport and manpower.
Market reports suggest that Indian steel demand saw a recovery of 25-30% in May but is marred by the problems of labour, liquidity, and logistics which is likely to get resolved only in the second half of 2020.
Supply Restraints
On the supply side, the Indian electrodes manufacturers are also operating at limited capacities amid the ongoing market uncertainty and labour shortage.
Also, as expected, Chinese GE suppliers are also not finding any substantial demand from the Indian market.
“The small EAF mills have not resumed their operations whereas big players are opting for Indian electrodes given the good quality and reasonable price being offered to them,” quoted an industry participant based in India.
Outlook
In the near term, the steel demand from two key sectors, construction, and auto, is likely to remain subdued during the rainy season. The dampened customer sentiments and financial constraints are unlikely to support the steel demand.
Amid the sluggish demand scenario and suspended operations from small EAF mills, the demand for electrodes is also unlikely to see any major uptick, and prices are likely to remain at similar levels due to restricted production.
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