Graphite electrode makers' prospects look bright; HEG stock rises

Light supplies to keep prices firm, help Graphite India and HEG book contracts for higher realisations

Shares of graphite electrode producers HEG and Graphite India hit new highs on Thursday on firm outlook for that business. The uptrend in demand and realisation for graphite electrodes, which has helped these stocks gain substantially in the past year, is likely to sustain. This is keeping the Street bullish on both.

Graphite electrodes, used in production of steel through the electric arc furnace method, have had a surge in demand from 2016, till when it was subdued. With supplies tightening and capacity additions limited for graphite electrodes, the companies benefitted. Electrode prices surged around five times in the past year.