HEG and Graphite India Share Price in Focus After Japan’s Resonac Shuts Production Plants

HEG share price and Graphite India share price saw a sharp rise on Monday, May 19, becoming two of the top three gainers on the Nifty 500 index. HEG rose by 11.20% to ₹545.55, while Graphite India jumped 15.34% to ₹561.00 at 11:26 AM.  

The sudden rally is linked to an international development — Japanese graphite electrode maker Resonac has announced the closure of its production units in China and Malaysia.

Resonac Shuts Down Overseas Plants 

According to Nikkei Asia, the decision by Resonac to stop production in China and Malaysia is aimed at improving profit margins. The company has been facing pressure from a flood of cheap Chinese products, which have reduced profitability.

Resonac is a major player in the graphite electrode industry, with a global annual capacity of 210,000 tonnes across six manufacturing plants. The shutdown of its Chinese and Malaysian operations may impact nearly one-third of its total production capacity.

After the shutdowns, Resonac will be left with four manufacturing sites — in Japan, the US, Austria, and Spain.

Impact on Global Graphite Electrode Supply

This shutdown is expected to reduce the global supply of graphite electrodes, which could lead to higher prices. As graphite electrodes are essential in steelmaking, their price plays a major role in the profits of companies like HEG and Graphite India.

Both HEG and Graphite India Stocks Still Below 52-Week Highs

Despite Monday’s strong gains, both HEG and Graphite India stocks are still 13% below their respective 52-week highs. However, the global supply cut could boost the sector’s outlook in the coming months.

Conclusion 

The decision by Japan’s Resonac to shut two of its overseas graphite electrode plants has sent shares of Indian graphite makers soaring. Reduced global supply may support prices and boost profitability for Indian players.

Read more on: SBI Joins List of World's Most Profitable Companies with Record ₹77,561 Cr Profit. 
 
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