Shares of Graphite India Ltd surged 12.65% to ₹547.95 in early trade on May 19, following positive sentiment stemming from global supply-side developments in the graphite electrode industry.
According to a Nikkei Asia report, Japanese firm Resonac has halted production of graphite electrodes at its plants in China and Malaysia. The decision is aimed at boosting margins, which have been under pressure due to increased competition from cheaper Chinese products. The move will reportedly reduce up to one-third of Resonac’s global electrode manufacturing capacity.
Resonac, a key player in the industry, currently operates six manufacturing facilities with a total annual capacity of 2,10,000 tonnes. With the shutdown of its subsidiaries in China and Malaysia, it will now consolidate production at four locations—Japan, the US, Austria, and Spain.
The potential reduction in global supply is expected to lift graphite electrode prices, offering a significant tailwind for Indian manufacturers like Graphite India and HEG Ltd. Analysts believe that tighter supply can improve realisations and boost profitability in upcoming quarters.
As of 10:00 AM, the stock was trading at ₹547.95 with a market cap of ₹106.90 billion and a dividend yield of 2.01%.
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