The graphite electrodes prices globally are on a freefall for over past one year amid excess supply and poor downstream demand with India being no exception to it.
While demand for GEs is already weak from EAF steel producing countries, electrodes exports to Iran-a major export destination for Indian GE suppliers has completely stopped due to existing U.S. sanctions on the former. However, according to market sources, Chinese GE suppliers are still able to send their electrodes to Iran by diverting their exports via few Middle Eastern countries thus dodging sanctions.
Amid this turmoil of tepid demand and increased competition in the world market (ex-Iran), one of the Indian electrodes manufacturers have resorted to offer GE at prices much lower than their global peers. SteelMint has heard from its reliable sources that a key Indian GE player has offered UHP grade electrodes of size 700mm at the rate of USD 4,350/MT to a company based out of Middle East. While its global competitors that includes Chinese, Japanese and Americans are offering the same anywhere in the range of USD 6,000-7,500/MT.
The current export price offered by the Indian electrode manufacturer has come as a surprise to the industry players especially its peers given the higher raw material costs. High quality needle coke prices a key ingredient for electrodes manufacturing are heard to be in the range of USD 3,400 – 6,000/MT.
In the domestic market, Indian manufacturers are offering UHP grade electrodes of size 700mm at USD 5,600/MT, 600mm in the range of INR 320,000 – 350,000/MT (4,520 – 4,950/MT) whereas HP grade electrodes are being offered at INR 120,000/MT (USD 1,700/MT).
Given the unpredictable export strategy being adopted by the Indian GE player, it remains to be seen whether the other players will follow the suit, electrodes prices will fall further and if yes how will companies survive amid burden of higher raw material costs.
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