The trade war that started between U.S. and China last year with U.S. imposing high tariffs on its steel and aluminium imports has impacted the global environment leading to escalation in trade and geopolitical tensions and closed economies.
The rising protection measures by various countries have taken a toll on the steel demand and production globally resulting which the demand for the graphite electrodes (GE), which is a key component of EAF steel production has also taken a hit.
India which is a key GE manufacturing country has seen change in its electrodes import and export trend over past one year. With the overall slump in the global steel industry, U.S. sanctions on Iran and removal of anti-dumping duty on GE imports by India, the electrodes imports from China have surged whereas its exports have registered a fall in the first eight months of 2019.
During Jan-Aug’19, India’s GE Imports have been recorded at 9,389 tonnes against 2,125 tonnes in the corresponding period of previous year. This is because, in August last year, Indian government had removed anti-dumping duty on the electrodes imports resulting which the GE imports from China have registered a sharp increase. As per the customs data, China’s share in total imports during Jan-Aug stands at 71% followed by Japan only at 8%. As per the market sources, non-UHP grade electrodes that are used in induction furnaces are imported into the country as these are not manufactured domestically.
Exports plunge
In terms of exports, India’s electrodes exports have registered a plunge of 28% y-o-y basis during first eight months of 2019 and stands at 39,454 tonnes.
The U.S. sanctions on Iran announced last year in August and then in November has completely closed the scope of GE exports to the country for the Indian electrodes manufacturers. Apart from this, the tough competition in terms of prices from the Chinese electrodes and slump in EAF operating rates globally has adversely impacted India’s GE exports in 2019.
Out of the total exports, exports to South Korea tops the list with 6,833 tonnes, followed by Egypt (4,962 tonnes), Turkey (4,546 tonnes). However, last year Iran was the highest electrodes importer, followed by Saudi Arabia, and Turkey.
For the upcoming months, given the pessimistic outlook of global steel demand, India’s electrodes exports are likely to register a further fall against the previous year whereas in case of imports, it is likely that Chinese electrodes may continue to make their presence felt in the Indian market.
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