Steel output, inventory normalisation support electrode prices: HEG
Posted on 10 June 2021
HEG says graphite electrode prices should start firming up from the next quarter. This comes as increased steel production and mills’ electrode inventory normalisation have boosted electrode demand and increased the firm’s capacity utilisation.
The firm’s revenue in the fiscal year through March 2021 fell 42% on-year to INR 1,256 crores ($172.2 million) and it reported a net loss of INR 25 crores versus a year-earlier profit of INR 53 crores. It has been producing at 85% capacity utilisation since the March quarter and expects to maintain this level for the next 2-3 quarters, Kallanish notes.
Construction of HEG’s 20,000 tonnes/year capacity expansion began in early 2020 but has been set back 2-3 months by the Covid-19 outbreak last year and the second wave in April/May this year. Nevertheless, the firm expects commissioning, which will take overall capacity to 100,000 t/y of electrodes, to be carried out at end-2022 or early 2023.
China’s push to cut carbon emissions from its steel industry will see the installation of electric arc furnaces, thereby boosting electrode demand. The removal of Chinese export rebates will meanwhile encourage new steelmaking investments in the rest of the world, where 47% of output is from the EAF route, HEG says. A potential Chinese tax on some steel exports would contribute to this trend.Source : Kallanish