Shares of Indian graphite electrode makers rose for the second straight day on expectations that they stand to gain from rising demand from steelmakers.
Reports of a supply crunch from Graftech International in the U.S. added to the rally. The world's largest maker of graphite electrodes declared force majeure following Hurricane Harvey-led disruption to its needle coke supply late on Thursday, S&P Global Platts reported quoting an anonymous steelmaking executive.
Shares of HEG Ltd. hit the 10 percent upper circuit for the second straight day, while Graphite India rose the maximum 20 percent on Friday. HEG has gained nearly 450 percent so far this year and Graphite India 330 percent. Jefferies initiated coverage on both the stocks anticipating strong demand and improvement in margins.
Demand for graphite electrodes, used in electric arc furnace for making steel, has grown significantly in the last six months. That's because China shut down environmentally unfriendly steel industries to curb pollution.
As a result, the spot price of electrodes has shot up by more than 300 percent to $30,000 per million tonnes since January.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
