Graphite electrodes price has seen a steep increase in recent months, the increase has seen both in the global and domestic market ; a month back it was around USD 2,000/MT and now it is increased steeply to USD 15,000/MT and with nil supply.To make 1 tonne of steel 2.5 to 3 kg electrodes are consumed.
The Reasons behind this steep surge:
1. Needle Coke which is a prime raw material used in making graphite electrodes witnessed a sharp hike in prices, from USD 300/MT in Feb’17 to USD 1200 at present.
2. Environmental crackdown has affected Graphite producers in China in a big way, leading to closure of around 50% of Graphite capacity. Chinese produces around 300,000 MT graphite electrodes monthly, out of which it used to export around 100,000 MT every month.
3. Induction Furnace steel and Mini Mills has been closed down which was producing mainly low quality long steel products.
The Indian Scenario
The electrode prices in India have risen in the past few months due to low availability, lower imports, and the anti dumping duty & this has led to acute shortage of graphite electrodes in market creating major problem for the steel manufactures who are in verge of closure of their mills. ASPA (Alloy Steel Producers Association of India), through its Chairman and ED – Delhi,) has met Ministry officials and expressed their serious concerns of the steel producers and have requested the Government to take effective steps to deal with the situation.
The point ASAP raised were:
1. Increase availability of graphite electrodes
2. Impose Export duty on graphite electrodes
3. Withdrawal of Anti Dumping duty on imports, which is at USD 922.03 per tonne for graphite electrode imported from China Steel
Manufactures from Odisha & Karnataka has commented on graphite crunch in the market that the demand is high for graphite electrodes in the past few months & there is no supply in the market as the suppliers are holding back the material. Also Prices have increased from INR 120/kg to INR 950/kg for HP grade (graphite electrode) as there are no offers from domestic supplier and this offer is for imported electrode from China. It looks like the major producers of Graphite electrodes in India are taking the benefit of the situation by creating artificial scarcity
India’s graphite industry:
Graphite India Ltd and HEG Ltd are two major players, who hold a major share in Indian graphite industry. If we consider the total installed capacity for the both the players is at around 180000 MT , however they are operating at 70 -75% of their installed capacity.
Exports – Imports : The exports of graphite electrodes as per the Dept of Commerce, India for FY’17 is 62800 MT, a 24% increase as compared to FY’16 which was 52778 MT . The imports in FY’14 (12800 MT) & FY’15 (13700MT) , saw an increase in cheaper imports from China which flooded the Indian graphite market, DGAD imposed anti dumping duty on imports from China in 2015. The import market became grayer in FY16 (6800MT) & FY17 (4000 MT) after anti dumping duty resulting in decline of imports by 40%
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