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Graphite manufacturers rally driven by Japan's newly imposed anti-dumping duty

ICICIdirect Research 28 Mar 2025 DISCLAIMER

As per media sources, the Japanese government will implement a provisional anti-dumping duty of 95.2% on graphite electrode imports from China for four, effective from 29th March’25.

Based on this, it is expected to create opportunities for domestic graphite electrodes players as China currently supplies 25% (15,000 tons) of Japan’s total annual graphite electrodes demand of 60,000 tons.

However, in our view, the benefits are likely 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% of its total graphite electrode shipments to Japan between April’24 and Dec’24 period, 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%.

This will benefit HEG, as India accounts for ~33% 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.

Thus, within domestic graphite electrode space, we remain positive on HEG given the global transition towards the electric arc furnace method of steelmaking, capacity expansion driving volume growth, and venturing into the emerging the graphite anode market.

Our last rating on HEG was BUY with a split share adjusted target price of ₹504 (value at SoTP basis i.e. 10x EV/EBITDA on core graphite electrode business, 2x P/B on equity investment in BEL and 2x CWIP to graphite anode business, all on FY26E).

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