HEG and Graphite stocks up

Shares of graphite electrode makers surged sharply in trade, with HEG  and Graphite India emerging among the top gainers on the BSE, driven by a confluence of global supply-side developments, improving sector fundamentals, and renewed investor confidence in the long-term outlook for the graphite electrode industry.

HEG Ltd jumped over 10% to trade around Rs 664, while Graphite India rose more than 8% to about Rs 636, as strong buying interest returned to the space. The rally comes amid renewed optimism around tightening global supply, after Japan’s Resonac announced the closure of graphite electrode manufacturing facilities in China and Malaysia, a move that effectively reduces global supply and improves pricing power for remaining producers.

Market participants also point to improving demand visibility from the steel sector, particularly as electric arc furnace (EAF)–based steelmaking gains traction globally amid decarbonisation efforts. With EAFs being heavy consumers of graphite electrodes, the expected rise in green steel capacity is seen as structurally positive for producers like HEG and Graphite India.

Adding to the positive sentiment, brokerage commentary has turned increasingly constructive, highlighting a “reset” in the graphite cycle. Analysts note that after years of oversupply and margin pressure, the industry is entering a phase of rationalised capacity, firmer pricing and healthier balance sheets. HEG, in particular, has drawn attention following promoter stake purchases, signalling confidence in long-term fundamentals, while both companies continue to benefit from disciplined capex and improved operating leverage.

From a market perspective, the rally was also supported by strong volumes and technical breakouts, with both stocks trading close to their 52-week highs. At current levels, HEG and Graphite India are seen as key beneficiaries of a recovering global steel cycle, tightening supply dynamics, and improving realisations, positioning them favourably as the next upcycle in the graphite electrode industry unfolds.