India to impose 20% export duty on graphite electrodes [CORRECTION]

The Indian government has included a provision to change customs tariffs for certain products including electrodes in its 2018 finance bill, which is currently being debated and is expected to be put to a vote for approval by the end of March.

The provision was included in the bill in an effort to “improve domestic [electrode] supplies and promote the electric-arc furnace (EAF) route of steelmaking in the country,” Irepas said late on Friday February 9.

“The effective rate of the export duty on such electrodes will, however, remain nil,” according to a notification published by the Indian Ministry of Finance on February 2.

Indian exports of graphite electrodes increased 49% year on year in January-October 2017, rising to 64,379 tonnes, according to statistics collated by India’s Directorate General of Foreign Trade.

India has two main electrode manufacturers: Graphite India and HEG Ltd.

Graphite India has a total production capacity of 80,000 tonnes per year in India and its German subsidiary, Graphite COVA, can produce 18,000 tpy. HEG can also produce 80,000 tpy, of which 66,000 tpy is ultra-high power (UHP) graphite electrodes.

Annual contract and spot prices for graphite electrodes in 2018 have risen sharply from last year around the world amid tight supplies.

Graphite electrode spot prices were around $23,000-26,000 per tonne at the end of January, Roeland Baan, chief executive officer of Finnish stainless steelmaker Outokumpu, said on January 31.

EAF production capacity at Indian steelmakers totalled 36 million tpy, or 29% of total steelmaking capacity, as of January 2017.

In comparison, Indian steel production capacity through the blast furnace route totalled 50 million tpy in January 2017, accounting for 40% of the total, while induction furnace output reached 38 million tpy, or 31% of the total.

India is aiming to achieve a crude steel production capacity of 300 million tonnes by 2030-2031, of which roughly 50 million tonnes would be produced through the EAF production route.

India’s Directorate General for Anti-dumping and Allied Duties is likely to review the anti-dumping duties on graphite electrode imports at the end of February “to ease shortages in the domestic market,” Irepas said, citing an Indian government official.

India’s current duties on graphite electrode imports are between $278.19 per tonne and $922 per tonne, depending on the origin of the product.

The duties were imposed in 2015 for a five-year period, according to Irepas.

Indian imports of graphite electrodes in April-October 2017 were about 2,900 tonnes, Irepas said.

In January, Mexico’s Ministry of Economy removed definitive countervailing duties on certain imports of graphite electrodes from China and the United Kingdom.

This article was amended on February 13 at 10:15am London time to reflect that the Indian government has not yet enforced the 20% export duty on graphite electrodes and that any export duty, if imposed, will be effective from April 1, 2018.