Introduction of Tariff rate is governed by the intent to somewhat ease the soaring cost pressure on the countryâ€™s steel makers through the EAF route, as the electrode prices have been rising to record levels in the international markets on account of stronger demand and dwindling supply.
Internationally, supplies of the electrodes have shrunk significantly, mainly due to the decreasing production in China, where the government implemented production cuts for the electrodes on environmental concernsâ€”the effect: exports from China diminished, and the global demand had turned towards other nations, such as India and Japan, and these countries saw abrupt rise in the electrode prices in their home markets.
In parallel to the supply squeeze, shortage of Needle Coke, which accounts for 70% of the electrode manufacturing cost, also has been adding fuel to the electrode price upsurge. Globally, Needle Coke supply has come under intense downward pressure due to the demand from the Lithium Ion industry getting stronger, eroding the supply for the electrode manufactures.
Indian Graphite Electrodes Exports Rise
The exports of the electrodes from India almost doubled during the Jan-Octâ€™17 period on year-on-year. During the first ten months of 2017, exports of graphite electrode from India grew by 49.2% to 64,379 MT from the exports of 43,146 MT in the Jan-Octâ€™16 period, an analysis of the data available with SteelMint shows.
In India, around 46% of steel production is through the Electric Arc route. The electrode market in the country is oligopolistic in nature, with only two producersâ€”Graphite India Limited and HEGâ€”dominating the supply scene.Â According to the data available with SteelMint, the respective productions of the companies were at 98,000 MT and 80,000 MT during Jan-Novâ€™17; and, around 60,000 MT was exported till Sepâ€™17.