Indian Graphite electrodes prices set to rise for Jul-Sept quarter: Sources

With India's graphite electrode (GE) prices being decided on a quarterly basis, the same is expected to rise by another INR 20,000-25,000/t across grades in July-September 2022. Post-hike, prices for the HP grade 450mm electrodes would be around INR 350,000/t ($3,370/t) and UHP grade 600mm would be at INR 425,000/t ($5430/t) ex-works basis.

However, this price rise is happening despite sluggish demand from steel mills, especially after the Indian government's decision to impose the export duty on steel.

The reason behind the price rise is higher imported needle coke costs which are currently trending at $2,000-2,200/t. The same last year was lower by $500-600/t compared to the current levels.

Meanwhile, Indian GE prices have already risen by about 45% y-o-y in the first half of this year.

The price hike has been effected amid improved steel demand in both domestic and export markets seen post-the pandemic years of 2020-2022.

During January-May, 2022, India's crude steel production rose 12% y-o-y to around 52.5 mnt. The electric arc furnace (EAF) contribution in India's total steel production stands at around 30%.

Higher Chinese offers supporting prices

Another factor supporting Indian electrodes prices are elevated Chinese electrodes offers. The offers for HP grade 300-500mm electrodes are currently heard at $3700-4200/t while UHP grade 600-700mm electrodes are at $4300-5000/t, CIF India basis.

On the demand side, requirements from Chinese downstream steel mills continues to be weak, and factors such as high temperature, rainy season, and weak trading activities have impacted trade volumes of Chinese GE as well.

However, despite this, electrodes prices continue to be at higher levels amid elevated needle coke costs. Due to the long production cycle of electrodes, most of the electrodes currently being offered in the market are produced from high-priced raw materials resulting which the scope of downward correction in electrodes prices is quite limited.