Recently, Indian graphite electrode manufacturers cornered investors’ attention with fundamentals pointing towards a turnaround in the sector. Key manufacturers in India – HEG and Graphite India Graphite electrode manufacturers are the key beneficiary of the improvement in its end market - global steel demand. Industry consolidation leading to lower supply and higher barriers to entry is also positive news. However, a sharp surge in raw material prices and China exports are the factors to watch out for which can cap this upside. Further, our calculations suggest that stock prices of both HEG and Graphite India are trading ahead of the expected pricing dynamics in medium-term. Industry-wide capacity consolidation – lower supply In the last few years, the global graphite electrode industry had witnessed curtailment of capacity (by 210 k tons) on account of weak profitability. Major companies like SGL Carbon and Graftech downsized their capacity by 100 kT and 60 kT, respectively. This has br…
Graphite electrodes are the main heating element used in an electric arc furnace, a steelmaking process where scrap from old cars or appliances is melted to produce new steel.
Electric arc furnaces are cheaper to build than traditional blast furnaces, which make steel from iron ore and are fuelled by coking coal. But the cost of steelmaking is higher since they use steel scrap and powered by electricity.
The electrodes are part of the furnace lid and are assembled into columns. Electricity then passes through the electrodes, forming an arc of intense heat that melts the scrap steel. Electrodes vary widely in size but can be up to 0.75 metres (2 and a half feet) in diameter and as much as 2.8 meters (9 feet) long. The largest weigh more than two metric tons.
It takes up to 3 kg (6.6 lb) of graphite electrodes to produce one tonne of steel.
The tip of the electrode will reach 3,000 degrees Celsius, half the temperature of the sun’s surface. Electrodes are made of graphite because only …
The latest from the mouth of The BIG, a proved individual in any parameter in the present period.
An edited verbatim transcript
The story of the financial savings getting huger and huger or large part of the savings in the household sector being invested in equity has just started.
A growing economy like India with reasonably good corporate governance practices, tax-free, I think India will grow nominal gross domestic product (GDP) at 12 percent. I see no way that Indian equity will not give you a return of 15 percent. Now you tell me one investment that I can sit in my office, have a liquid investment, borrow at very fine rates and get a 15 percent return. I do not see many investment opportunities like that. So by my sheer common sense, I feel that this money is going to continue and I think this is not even a flood, it is going to be a flood and it is going to be a tsunami.
In America, investment in mutual funds in equity, mutual funds went up from USD 162 billion in 1984-1985 to USD…