Industry Profile: Graphite electrodes are large cylindrical structures made up of needle coke (petroleum coke). These electrodes are available in small or large diameters for high-temperature and high-intensity applications. Graphite electrodes are mainly used for steel manufacturing in electric arc furnaces. They are also used in steel refining and smelting processes. The key application of graphite electrodes is in the production of steel and non-ferrous metals. Properties such as high heat resistance, low electrical conductivity, resistance to thermal shock, and low chemical reactivity are anticipated to boost the demand for graphite electrodes. The graphite electrode market was valued at about US$ 10 Bn in 2017 and is projected to expand at a CAGR of 3% during the forecast period. Factors such as a rise in demand for graphite electrodes in end-use industries, an increase in the utilization of steel scrap, and high demand from the steel industry are expected to drive demand for graphite electrodes. Graphite electrodes possess favorable electrical properties, high mechanical strength at high temperatures, high electrical and heat conductivity, low impurity content, chemical stability, and high vibrational resistance. Graphite electrodes used in Electric Arc Furnaces (EAF) provide flexibility in varying their steel production unlike the blast furnace method of steel production. EAF units can be rapidly started and stopped, allowing the steel mill to vary production according to demand. Due to the flexibility, quick turnaround time, and lower fixed costs of EAF, they have gained popularity among steel producers. However, the low availability of raw materials and fluctuating costs are restraining the graphite electrodes market.
The Asia Pacific is a key region of the graphite electrodes market. North America and Europe hold a prominent share of the global graphite electrode market. Demand for graphite electrodes expanded rapidly in the Asia Pacific in 2017 owing to changes in Chinese government regulations. The Asia Pacific is a key region of the graphite electrodes market due to the high consumption and production of graphite electrodes in Japan, China, and India. Steel and non-ferrous metals are a major application segment in Asia owing to the region’s high share in steel making. China is a key country in the market in the Asia Pacific due to the increasing share of EAF-based steel production in the country. Key players operating in the graphite electrode market include Showa Denko K.K., GrafTech International, Graphite India Limited, Nippon Carbon Co. Ltd., HEG Limited, Kaifeng Carbon Co., Ltd., Nantong Yangzi Carbon, SEC Carbon, Ltd., Nantong Yangzi Carbon Co., Ltd. and Tokai Carbon Co., Ltd.
Company profile: Part of LNJ Bhilwara Group, the company is one of the 2 premier Graphite electrode manufacturers. The company is having many manufacturing plants all over the world. The company exports 70% of its production to 30 countries. The company produces two grades of graphite electrodes High Power and Ultra High Power which are manufactured according to the customers’ needs and requirements. Many big steel companies are customers of the company namely ArcelorMittal POSCO Thyssenkrupp US Steel Nucor and Usinor in their customer base.
HEG also makes Fine Grain Carbon Blocks for various applications on special orders. These blocks are used to make value-added products like Heat Exchangers, etc. the company also manufactures graphite products as per the demand of customers. One another product of the company is ACF ( Activated Carbon Fabric.) used in AC filters and the majority of pollution control filters.
Shareholding Pattern: BSE Data
Financials and ratios: [table id=186 /]
Future prospectus: Due to environmental issues mining is low in the Asia Pacific, a major market for graphite electrodes, but at the same time, the demand is increasing. There is no capacity addition in view at the current time. All of these factors make it more and more attractive for the whole sector. The steel sector is moving in a cyclical format. As China is caring much about its environmental concerns, India is supposed to be the next market.
Steel is beyond doubt an important part of industrial development and so You can’t ignore it. Whenever the sector will start an uptrend or whenever the sector start working, Demand for electrodes will go up. But for 2023, it is looking difficult as financial markets are facing higher interest rate cycles. Many global banks and other institutions are increasing interest rates. The steel industry is definitely capital intensive, which will affect them and so not many people will ask for electrodes.
