India Ratings and Research (Ind-Ra) has affirmed HEG Limited's Long-Term Issuer Rating at 'IND AA'. The Outlook is Stable.
Ind-Ra expects the global demand-supply dynamics to remain healthy for graphite electrode (GE) players owing to a reduction in the overall ultra-high powered GE capacity to 725,000 tonnes per annum (tpa) in 2018 from 810,000 tpa in 2014, resulting from capacity closures.Also, low capacity additions by 2022 and limited availability of needle coke, would restrict new supplies and overall capacity utilisation levels. Moreover, the agency expects robust GE demand to sustain, as the environmentally superior electric arc furnace (EAF) route steel production's share would gradually improve, along with the overall steel demand growth.
HEG has been witnessing higher GE prices since 2HFY18 owing to a surge in EAF route steel production, supported by China's steel capacity rationalisation. Ind-Ra expects China's steel exports to remain around 70 million metric tonnes (mmt) in the medium term as capacities are unlikely to grow considerably and the global large consumers of steel are likely to continue protectionist regime. China's exports reduced to 69mmt in 2018 (2017: 75mmt, 2016: 110mmt), while global importing nations ramped up their EAFs, thus supporting strong GE demand over 2018. Ind-Ra expects ultra-high power GE demand to remain stable at around 700,000 over the short-to-medium term. During 2017-2018, the demand for GE increased 35-40 kilo tonnes per annum, leading to panic in the markets and abnormal realisations of around USD20,000/tonne from the long-term average of around USD4,000/tonne.
Shares of HEG LTD. was last trading in BSE at Rs.1367.05 as compared to the previous close of Rs. 1347.2. The total number of shares traded during the day was 25743 in over 2402 trades.
The stock hit an intraday high of Rs. 1399.95 and intraday low of 1338.1. The net turnover during the day was Rs. 35278862.