Graphite electrodes shares in demand; Graphite, HEG soar 15%; here's why

Business Standard

19-05-2025

Graphite India, HEG share price today
Shares of graphite electrodes companies, Graphite India and HEG, rallied up to 15 per cent on the BSE in Monday's intraday trade. The rise in Graphite India and HEG shares came amid reports of Japan's Resonac planning to close graphite electrode plants in China and Malaysia.
Individually, Graphite India zoomed 15 per cent to ₹558.75, hitting an over three-month high on the BSE. The average trading volume on the counter jumped nearly 10-times today with as many as 7.27 million equity shares, cumulatively, changing hands on the NSE and BSE.
Shares of HEG, meanwhile, surged 11 per cent to ₹544.65 on the back of a three-fold rise in its average trading volume. Around 5.32 million shares, together, changed hands on the NSE and BSE till the time of writing this report.
What's driving the rally in Graphite India, HEG stock prices?
According to reports, Japan's Resonac will quit Chinese and Southeast Asian production of graphite electrodes for steelmakers, scaling back in a bid to improve margins that have been squeezed by an influx of low-priced Chinese parts.
Graphite electrodes are used in electric arc furnace (EAF) based steel mills and is a consumable item for the steel industry. The graphite electrode industry is highly consolidated with the top five major global manufacturers accounting for almost 75 per cent of the high end UHP electrode capacity. The majority of this capacity, however, is currently located in high cost regions like the US, Europe, and Japan.
K K Bangur, Chairman of Graphite India, on May 14, 2025, said that the graphite electrode prices remain under pressure, while raw material costs, particularly petroleum needle coke, have not declined in tandem, leading to an impact on operating margins.
Given the company's diversified export portfolio across multiple geographies, the impact of any US tariffs on the company's financial performance is limited.
That said, the outlook for graphite electrodes remains positive with the medium-term move towards EAF-based production, which supports lower carbon emissions and greater operational flexibility. As of 2023, EAFs accounted for 28 per cent of global steel production, with this projected to increase to 41 per cent by 2030.
In the US, the transition is more advanced with 68 per cent of steel already produced through the EAF route, highlighting the growing move towards cleaner steelmaking technologies. In line with these global sustainability initiatives, approximately 100 million tonnes of new EAF capacity is expected to be added over the next 2 to 3 years.
The focus on substantial decarbonisation measures in developing economies supports the growth of the EAF process compared with the Blast Furnace / Bessimer Oxygen Furnace (BF/BOF) process. Governments around the world are also introducing stringent environmental regulations to reduce pollution. This will further support the growth of the EAF process and along with decarbonization, drive the future demand for graphite electrodes.
The use of the EAF process in the steel industry is not only important for sustainable steel production but is a more cost-effective manufacturing method.
About Graphite India
Graphite India is the largest Indian producer of graphite electrodes and one of the largest globally by total capacity. Its manufacturing capacity of 98,000 tonnes per annum is spread over three plants at Durgapur and Nashik in India and Nurnberg in Germany.
The company, through its subsidiary, has progressively acquired and now owns more than a 60 per cent stake in General Graphene Corporation, a US based company which has developed a breakthrough proprietary technology which would allow it to produce large area, high quality, low cost graphene sheets in industrial applications in scaled up commercial volumes.
Graphite India has also acquired a 31 per cent stake in Godi India. This investment is part of its strategy to diversify into advanced chemistry battery technologies for the development of electric vehicle (EV) and energy storage battery cells.