Leading graphite electrodes manufacturer, Graphite India is witnessing a growth for electrode demand in the European region. The company’s German operations have started showing signs of recovery, according to the company’s earnings report.
In Q1 FY2022, Graphite India’s consolidated capacity utilization rose to 75pc compared to 36pc in Q1FY2021 and 73pc in Q4FY2021. The utilization fell in Q1FY2021 due to the impact of the first wave of the COVID-19 pandemic. The company’s realization in Q1 improved from Q4 but was still offset by a marginal dip in electrode volumes due to the second wave of COVID-19 in India. The demand for steel and electrode in India has started to increase from June amid the easing of restrictions.
Graphite India expects strong demand for steel and electrodes in both the domestic as well as international markets on the normalization of economic activities. Also, lower steel exports from China will lead to higher production in the electric arc furnace (EAF) based steel producing nations, leading to increased demand for electrodes in the near term. But the rise in needle coke prices in sync with electrode prices could exert some pressure, stated the company.
In the domestic market, increased government spending on infrastructure and recovery in key sectors such as construction, capital goods, automobiles and mining could boost steel production and electrodes demand.
Also, EAF steel manufacturers in India should benefit from the withdrawal of customs duty on scrap imports, stated the report.
Graphite India’s net sales increased to Rs6,100mn ($82.12mn) in FY2022, up by 49pc from the prior-year quarter and up by 8pc from Q4. Net profit was Rs1,500mn compared to a loss of Rs780mn in Q1 FY2021.
Graphite India is one the largest graphite electrodes producer by total capacity. The company’s annual installed capacity is 98,000mt with three plants; two in India at Durgapur and Nashik and one in Nurnberg, Germany. Exports account for nearly half of its total revenues.
Graphite electrodes are used in EAF based steel mills. It is a consumable product for the steel industry.