“Lower volumes, realization and increase in average needle coke cost has impacted the sales and margins as compared to same period last year,” Graphite India said in a statement.
The management said global slowdown in steel demand coupled with increased steel exports from China is expected to impact demand of electrodes.
India removed anti-dumping duties on graphite electrodes imported from China in September 2018 which has resulted in increased imports. Steel prices also continue to remain under pressure and combination of these factors have resulted in significant correction of electrode prices. Needle coke prices remained high during the quarter under review and has started moving down in the current quarter, it added.
The demand for steel decelerated in 2019 due to geopolitical issues, trade tensions and uncertainty over world economic growth which has impacted the investor sentiments, capital investments and trade. Manufacturing sector, particularly the auto industry, has performed poorly in many countries.
At 02:25 pm, Graphite India was trading 3 per cent lower at Rs 283 on the BSE, as compared to a 0.54 per cent rise in the S&P BSE Sensex. A combined 2.98 million shares changed hands on the counter on the NSE and BSE so far. The stock hit a 52-week low of Rs 255 on October 9, 2019 in the intra-day trade.
Meanwhile, the stock of the peer group company, HEG was trading 3 per cent lower at Rs 996 on the BSE.