India's GE exports rise 28% in 2021 on higher US imports

India's graphite electrode (GE) exports in 2021 rose 28% to 70,148 tonnes (t) against 54,797 t seen in 2020, as per provisional data available with SteelMint.

In 2021, the top three importing countries from India were Turkey, USA and Egypt. While exports to Egypt remained stable at around 7,500 t, volumes to Turkey, at 9,450 t (6,728 t) and USA, at 9,286 t (5,275 t) were up 41% and 76% respectively y-o-y in this period.

Volumes to South Africa spurted by 167% to 4,286 t (1,607 t) and to Spain by 160% to 3,222 t (1,241 t). Exports to Kuwait, Indonesia and Germany also rose 486%, 308% and 531% but these volumes were comparatively smaller y-o-y.

Graphite electrodes act as a conductor for large electrical currents which are needed to melt ferrous scrap in the steelmaking process in an EAF. This is due to the electrode's high thermal conductivity and heat-resistance performance.

Factors that influenced rise in GE exports

US imports rise sharply: The main factor that boosted exports was USA. The country's sole GE producer, GrafTech, had opted for maintenance shut-down of its European operations Q3CY'21, which forced several EAF mills in USA to import from India. GrafTech's capacity utilization dropped to 81% in Q3CY'21 compared to 86% in the previous quarter. But overall production was at 119,000 t in Jan-Sept'21 compared to 98,000 t in the same period of the previous calendar.

USA, on its part, saw its crude steel production rise 19% to almost 79 mn t in Jan-Nov'21, which further necessitated GE imports to keep the electric arc furnaces burning.

Turkey imports buoyant: Turkey, a key GE importer, produced 36.7 mn t of crude steel over Jan-Nov'21, up 13% y-o-y. There are projections in many quarters that production may touch 38 mn t by end of 2021. Consumption is expected to reach 35 mn t. Turkey, which is mainly dependent on the non-blast furnace route of steel-making, has thus shown an increasing propensity for GE imports.

Anti-dumping duty on Chinese GE: Indian graphite electrodes, being of better quality compared to Chinese, command higher prices in the export market. However, since a few countries have anti-dumping duty applicable on Chinese GE, this made Indian GE more attractive.

India's GE production rose last year: India's GE production across grades was higher, at around 140,000 t, as per Steelmint's estimates, compared to about 100,000 t in 2020, which allowed Indian producers to export in higher volumes. GE producers generally prioritise domestic demand over exports. Domestic annual consumption is 60,000-65,000 t. GE output dropped in 2020 because of Covid-induced lockdowns which saw almost nil output over Apr-Jun'20 but improved last year which left producers with more material for exports.

Imports up: India's imports of GE increased in 2021, which also allowed producers more material for exports. Imports in 2021 rose to around 10,000 t compared to a little over 7,000 t in 2020.

Outlook

As the steel industry globally becomes more carbon-conscious and enlarges the scope of EAF steel-making, the demand for GE will only rise and which would spell good news for Indian exporters.

China's decarbonization drive could result in increased demand for GE. However, supply risks may continue in the near term against a backdrop of global energy controls.