Has India's Graphite Electrodes Import from China Increased Post Removal of Anti-Dumping Duty?

Earlier in 2015, the Finance Ministry of India had imposed anti-dumping duty on graphite electrodes imports from China for a period of five years. The key objective of the government behind this move was to defend the domestic industry from low-cost shipments of GE, especially coming from China and the petition for the same was filed by the Indian manufacturers HEG Ltd and Graphite India.

However, when in the latter half of 2017, electrode demand and prices in China rose dramatically amid its structural side reforms and promotion of electric furnaces, the GE manufacturers across the globe including those in India also took advantage of the situation by raising electrodes prices significantly and exporting more to the overseas market.

Now the exponentially high GE prices and lesser domestic availability of especially lower grade (RP, HP) electrodes due to anti-dumping duty led to acute shortage of graphite electrodes in Indian market creating major problem for the EAF steel manufactures in the country.

To get relief from this problem Alloy Steel Producers Association of India (ASPA) requested the DGAD (Directorate General of Anti-Dumping Duty), which comes under Ministry of Commerce, for initiation of a mid-term review of the anti-dumping duties imposed on the imports of Graphite Electrode originating in or exported from China. Such a review is undertaken only if a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty.

Subsequently upon its review, in Aug'18 DGAD announced the removal of anti-dumping duty on graphite electrodes imports into India stating a reason that given the rise in global GE prices, imports are no longer threat to the Indian market.

Subsequently after the removal of anti-dumping duty the big question that is hovering is whether Chinese GE have once again started making their way into India. This can be analysed by studying India's GE import trend in past two years.

How much GE India imported from China in 2018?

As per India's customs data, although the quantity of GE imported into the country is not very high, a surge of 84% y-o-y basis have been recorded as the same has increased from 3,181 tonnes during Jan-Nov'17 to 5,838 tonnes in Jan-Nov'18.

Out of the total imports of 5,838 tonnes during Jan-Nov'18, highest imports have been recorded from China at 3,604 tonnes followed by Malaysia at 1,846 tonnes. Whereas, in the corresponding period of 2017, imports from China stood at only 414 tonnes and the highest imports came from Malaysia at 1,456 tonnes.

This means that removal of anti-dumping duty on GE imports by India have resulted in a higher quantity of Chinese GE entering into the country.

According to the market sources, although Indian manufacturers are quite capable to producing higher grade electrodes, many EAF steel manufacturers in India require lower grade GE that are not manufactured here and thus they import the same from China. Moreover, chances are high that this may increase in the coming months of 2019.