HEG, Graphite extend rally on positive outlook; surge up to 20% in 2 days

The recent price hike by Chinese manufacturers for high-power (HP) graphite electrodes is likely to push domestic HP electrode prices up by 7 per cent, according to ICICI Securities

HEG’s share price has moved higher by 7 per cent to ₹516.20 on the BSE in Wednesday’s intra-day trade amid heavy volumes in an otherwise subdued market. 

 

In the past two days, the stock price of the company has surged 20 per cent on reports that the Japanese government will impose a 95.2 per cent anti-dumping duty on China’s graphite electrode exports for four months as a provisional measure, effective from March 29, 2025. Additionally, Chinese producers have already implemented a price hike for high-power grade graphite electrodes.

 

HEG has been the world’s largest single site graphite electrode plant under one roof with a capacity of 80,000 tons per annum for a long time. The company recently completed its expansion to 100,000 tons to become the third largest producer of Graphite electrodes in the western world. It has been exporting approximately 65 – 70 per cent of its production to about 35 countries around the world consistently for more than 20 years.

 

 

At 11:34 AM, HEG was quoting 4 per cent higher at ₹504, as compared to the 0.12 per cent decline in the BSE Sensex. A combined 13.85 million shares, representing 7.2 per cent of total equity, of HEG have changed hands on the NSE and BSE. The stock had hit a 52-week high of ₹619.25 (adjusted to stock split from ₹10 to ₹2) on December 5, 2024.

 

Meanwhile, Graphite India share price was up 4 per cent at ₹514.85 on the BSE in intraday trade today. In the past two days, the stock has gained 12 per cent. On Tuesday, it hit a high of ₹525 in intraday trade. Graphite India is mainly engaged in the business of manufacturing and selling of graphite, carbon and other products.

 

According to ICICI Securities, the impact of Japan’s anti-dumping duty on Chinese graphite electrodes is expected to be minimal, as Japanese steel producers are already grappling with weak domestic demand, with monthly production hitting a five-year low. This decline will naturally curb the need for graphite electrodes in the region. Furthermore, India exported only 5 per cent of its total graphite electrode shipments to Japan between April 2024 and February 2025, thereby not expecting any potential gains. 

 

Meanwhile, the recent price hike by Chinese manufacturers for high-power (HP) graphite electrodes is likely to push domestic HP electrode prices up by 7 per cent. This will benefit HEG, as India accounts for 33 per cent of its total revenue, with the company actively supplying HP graphite electrodes to the domestic market. Graphite India is also expected to gain due to its strong market presence in India, the brokerage firm said in a note.

 

Regarding the industry's outlook, HEG, in a Q3 investor presentation, said the decarbonisation push in the steel industry is expected to boost demand for graphite electrodes, as the adoption of Electric Arc Furnace (EAF) steelmaking expands globally. This transition is projected to create an additional demand of approximately 200,000 tons by 2030 (excluding China).

 

Despite short-term pressures, decarbonisation is now an irreversible trend, and HEG remains optimistic about the long-term growth potential for graphite electrode demand.

 

As global decarbonisation efforts make headway, the demand for graphite electrodes will increase going forward. Rising steel consumption, particularly in infrastructure, automotive and construction will further support long-term growth potential for graphite electrode manufacturers, said K K Bangur, Chairman of Graphite India in the Q3 earnings release.