Graphite India surges 13 per cent

The stock of Graphite India and HEG surged on Wednesday's morning session and was trading up by 13 per cent. This is a good bounce back after experiencing correction last year.

The sudden spike in the stock prices of graphite electrode producers can be attributed to global cues. The second largest graphite electrode producer, Tokai Carbon, a Japan-based manufacturer raised contract prices of its products for H1CY19. This has triggered investor interest in the stock.

Graphite electrode is an indispensable material for Electric Arc Furnaces (EAF) used for steel production, globally. It is a product with high entry barrier, hence the manufacturers enjoy good pricing power. The graphite electrode producers also have an advantage from the tightening of environmental protection policies in China as EAF have 80 per cent less carbon emission than their predecessor Basic Oxygen Furnace (BOF) technology. This adoption of EAF furnaces is also helping the industry.

In pre-lunch session on Wednesday, the stock of Graphite India was quoting Rs. 770.00, up by Rs. 75.35 or 10.85 per cent. The stock opened at Rs. 700 per share and hit an intraday high of Rs. 799. While HEG Limited was quoting at Rs. 3,803.20 per share, up by Rs. 262.20 or 7.40 per cent. The stock opened at Rs. 3,545 per share and hit an intraday high of Rs. 3,925.00 on Wednesday.