In the light of fresh indications of a bull rally in prices for graphite electrode, which may leave steel producers in a quandary, the Steel ministry has allegedly questioned Indian graphite electrode manufacturers about the soaring prices.
Sources in the knowhow of the development revealed to SteelMint that the government has been taking stock of the soaring prices of graphite electrode throughout 2017.
And owing to possibilities of the prices of the valuable steel making commodity going up again, the Central Government is keen to intervene in the matter.
According to sources Indian graphite electrode manufacturers have assured the steel ministry that the there is no difference between international and domestic offer prices and the main reason for price rise is the surge in Needle Coke cost which occupies at least 70% component of total graphite electrode manufacturing cost.
According to reports the prices of needle coke has risen by more than 600% in the last year. Moreover, there are just a few refineries that produce needle coke. It is owing to international dearth of Needle coke that has sent prices of Graphite Electrode soaring in India as well.
Presently there are two manufacturers of Graphite electrodes in India namely Graphite India Limited and HEG which reportedly produced 98,000 MT and 80,000 MT of the product respectively, till November 2017. About 60,000 MT of graphite electrodes were exported from India till September, 2017.
Alleging that Indian graphite electrode manufacturers are selling most of their production in overseas markets EAF steel producers recently urged the government to take necessary protective measures, and the Steel Ministry has responded by proposing a 30% Export Duty on graphite electrode exports.
According to EAF steel producers, they have been compelled to raise the cost of steel owing to high raw material costs which has in turn rendered their products uncompetitive against steel manufactured from other routes.
Producers recently had also urged the government to withdraw the anti dumping duty on graphite electrodes in order to source the product from international suppliers like China, at lower prices.
It may be noted here that despite anti-dumping duty around 10,000 MT of Chinese graphite electrodes had made their way into India till September 2017.
According to SteelMint analysis out of total steel production in India around 54% takes place through the Blast Furnace route and the remaining by EAF and Induction Furnaces.
With a massive share of the country’s total steel production being done through the EAF/IF route the demand for Graphite electrode is not only going to persist but may gradually increase in 2018. If the supply side restriction persist the possibility of prices for Graphite Electrode coming down any time soon seems to be bleak.