The prolonged glut in global steel sector over past one year and excess supply from China seems to have taken a toll on the Indian graphite electrodes prices.
While the HP grade GE prices in the domestic market have registered a fall of about 86%, UHP grade prices have plunged by 62% compared against the latter half of 2017 when the electrodes prices recorded a surge amid supply-side structural reforms in China.
SteelMint has heard from its market sources that the HP grade electrodes of size 500mm are being sold at INR 125,000/MT (USD 1,754/MT) whereas UHP grade GE of 600mm are being traded in the range of INR 350,000 – 400,000/MT (USD 4,890 – 5,585/MT).
“The Indian manufacturers at present are selling electrodes at throwaway prices given the tough competition from the Chinese counterparts in the domestic market”, said an industry participant.
As per the customs data, India’s electrodes imports during first nine months of 2019 (Jan-Sep) stood at 9,970 tonnes against 4,669 tonnes in the corresponding period of previous year. The highest imports of about 71% came from China followed by Japan at 9% and France at 7%.
With regards to future fall in the domestic electrodes prices, industry participants are of the opinion that the probability of prices falling below the current levels is less as the further plunge might lead to production loss for the manufacturers. The raw material costs (comprising of needle coke) constitutes highest share in GE’s total cost of production. Although the needle coke prices have registered a fall following the plunge in GE prices, the fall is not as major as major as that of graphite electrodes. At present, the domestic NC costs in China are in the range of USD 1,800 – 1,900/MT whereas the needle coke prices offered by the global market players are in the range of USD 2,100- 4,000/MT.
In terms of exports, the electrodes offers from India are heard to be in the range of USD 5,000-5,500,MT, CFR basis. During Jan-Sep, the country has exported about 45,987 tonnes against 63,953 tonnes in the corresponding period of previous year. The drop in exports can be attributed to sanctions on Iran due to which Indian manufacturers completely stopped their supplies to the country. In 2018, Iran’s percentage in India’s total electrodes exports stood at 11% whereas in the ongoing year of 2019, exports to Iran stands almost negligible.
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