In the new budget for 2018-19, the Indian government has made it possible to collect a 20 percent export tax on graphite electrodes to improve domestic supplies and promote the electric arc furnace (EAF) route of steelmaking in the country, however the export duty on the product in question remains nil for the time being. The 20 percent export tax might become effective anytime after April 1, the date the new budget comes into force, when the government deems it necessary to restrain exports.

A government official said that existing EAF-based steel mills are facing acute shortage of graphite electrodes with global buyers facing difficulties in sourcing the input from China and India graphite electrode exports have increased by around 49 percent during the past eight months. Ensuring supply of the input is in line with the government’s stated policy of promoting EAF steelmaking, envisaging that it will account for an estimated 50 million mt per year of the country’s projected steelmaking capacity of 300 million mt by 2030, up from around 126 million tons at present.

Industry sources pointed out that, given the duopolistic nature of domestic graphite electrode production, it is difficult to increase domestic production. The two Indian manufacturers – Graphite India and HEG Limited – have a combined installed capacity of approximately 180,000 tons per year, controlling about 10 percent of the global graphite electrode market, second only to China.

On the other hand, India’s Directorate General for Anti Dumping and Allied Duties (DGAD) is likely to review the antidumping (AD) duty on this steel making input around end of the current month, a government official said on Friday, February 9. The official said that, against the backdrop of the export tax and the shortage of graphite electrodes faced by domestic electric arc furnace (EAF) operators, it is only logical that the antidumping duty currently in force will be reviewed to ease shortages in the domestic market.

At present, the antidumping duty rate on graphite electrodes ranges between $278.19/mt and $922/mt, depending on the origin of the product. The import protection measure was imposed by the DGAD in 2015 for a period of five years. According to data sourced from the government, Indian imports of graphite electrodes during the April-October period of 2017 amounted to around 2,900 mt. During the January-October period, Indian exports of graphite electrodes were estimated at 64,300 mt.