- 16 Sep 2024
- ICICI Securities
RESONAC GRAPHITE HAVE ANNOUNCED A MINIMUM 20% OF GLOBAL PRICE INCREASE
News: Resonac Graphite (erstwhile Showa Denko), which is one of the leading players in manufacturing of graphite electrodes, have announced a minimum 20% of global price increase on all new graphite electrode orders on 9th September’24.
Views: The recent price hike announced by one of the leading players came as an unexpected positive move given the overall industry facing a sluggish demand due to uncertainties in the global steel industry. Consequently, this may lead to other global players such as HEG and Graphite India to consider the similar price hike going forward. We shall closely monitor developments in this space as this will substantially improve profitability at domestic graphite electrode players (HEG reported an EBITDA margins of 12.2% in Q1FY25 at ~US$ 3,500/tonne realisation). From a long-term perspective, we remain optimistic about HEG, as increasing decarbonization efforts in the steel industry are expected to boost the demand for graphite electrodes, benefiting domestic industry players. Additionally, the company’s investment in the emerging graphite anode business position it well positioned for future growth.
Impact: Positive