The domestic GE (Graphite electrode) prices have been stable with minor fluctuations since Apr’20 but are likely to increase in the next quarter (Oct-Dec’20).
India-China friction acting as a trigger
Indian buyers are preferring domestic material and there is an absence of Chinese offers after the build-up of animosity between India and China in June.
Indian GE manufacturers also shut their plants for almost a month, as the nation-wide lockdown in was announced in late March.
However, despite disruption in production, there was no shortage of electrodes as the EAF (Electric Arc Furnace) steel manufacturers were well stocked, and towards end-April GE producers also resumed operations.
Currently, EAF operational rate have returned to normal levels and the electrodes demand has improved.
“Although, there was not much imports from China even before lockdown, Indian buyers used the Chinese GE price levels to negotiate with the domestic electrode manufacturers for better deals.
However, now with the relations turning sour between the two countries, the chances of Chinese GE coming into India are quite less, thus giving opportunity to the domestic sellers to increase their prices”, remarked a GE trader based in India.
Indian GE price and Imports
The Indian GE price for 600mm UHP grade is currently trending at INR 280,000/t ($3,740/t) and that of 450mm HP grade is at INR 130,000/t ($1,740/t).
Indian GE imports during Jan-Apr’20 (latest Customs data) stood at 2,509 tonne with 45% coming from China and rest coming majorly from EU. During the same period last year, imports stood at 3,377 tonne with about 87% coming from China.
Outlook
Indian manufacturers are selling especially the HP grade electrodes at a loss, and their profits have suffered dramatically this year amid the soft demand, after the outbreak of the pandemic. Thus, the likely price rise is expected to provide support and respite to the badly hit financials of the Indian GE suppliers.
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