Shares of Graphite India Ltd. and HEG Ltd. soared on Monday after Japanese firm Resonac Holdings announced the closure of its graphite electrode plants in China and Malaysia. The move, seen as a major supply-side disruption in the global electrode market, lifted investor sentiment around Indian manufacturers expected to benefit from tighter supply and improved pricing power.

Graphite India ended the day 16.8% higher at ₹568.20, while HEG climbed 7.77% to ₹528.27.

According to Nikkei Asia, Resonac, which has an annual production capacity of 2,10,000 tonnes across six facilities, has decided to shut down its China and Malaysia units due to margin pressures from cheap Chinese imports. The closures are expected to impact up to one-third of its global capacity, with the company continuing operations at only four sites, in Japan, the US, Austria, and Spain.

Graphite electrodes are used primarily in Electric Arc Furnace (EAF) steelmaking, a lower-emission alternative to blast furnace methods. With global steelmakers increasingly adopting EAF, demand for electrodes has been on the rise, making any supply disruption particularly significant.

Analysts expect both companies to benefit from improved pricing, higher export demand, and better capacity utilisation as global supply tightens.

With Resonac’s exit from key Asian markets, Indian players like Graphite India and HEG are expected to play a larger role in meeting international demand, potentially driving revenue and margin growth in the quarters ahead.

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