The negative sentiments have engulfed the global graphite electrodes market and India is no exception to it. In past one year the domestic electrode prices in India have registered a significant plunge of 64% y-o-y basis. The current price for 600mm UHP grade electrodes is trending at INR 320,000/MT (USD 4500/MT) whereas that of HP grade 400mm is at INR 120,000 – 140,000/MT (USD 1,700 – 2,000/MT).
The free fall in prices is mainly led by high inventories in the system and market share battle between the two Indian producers in the domestic market. Domestic utilisation levels have fallen to 50% at present against 85-90% in last financial year 2019-20 amid lack of orders.
Domestic GE producers are operating just at 50% utilisation and expects to remain at the similar levels in next quarter also. According to the industry sources, the price correction will continue in Jan-Mar’2020 quarter also with prices to drop further by 20-25% q-o-q basis as companies are negotiating on monthly basis.
Iran was an important export destination for Indian GE producers with 5-8% of total volumes being exported to Iran. U.S. sanctions on Iran in 2019 added to market surplus in GE and contributed towards the price correction. The recent geopolitical tensions between U.S.-Iran and U.S. government’s recent warning to Graphite producers rules out any chance of relief at least till next quarter.
In terms of raw material, petroleum-based needle coke prices are being heard in the range of USD 3,300 – 3,500/MT which are expected to fall in Apr-Jun quarter as Indian GE producers have already signed contract for needle coke till March 2020.
Leave a Reply