Electrode prices have bottomed out in Q4FY21: Manish Gulati, ED, HEG Ltd
Manish Gulati, Executive Director, HEG Limited, talks about the March quarter numbers and graphite electrode prices during a candid chat with Swati Khandelwal, Zee Business.
Manish Gulati, Executive Director, HEG Limited, talks about the March quarter numbers and graphite electrode prices during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:
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Q: Numbers have improved a lot compared to last year and the loss of Rs 377 crore has declined to Rs 16 crore. What were the reasons and what is your outlook for the future?
A: Like I said in the last interview that we were carrying high-cost inventory. So, the inventory took a lot of time to get out last year. So, the loss we booked in FY2019-20 that was only because our high-cost inventory was realigned and put on NRV. So, in the year that passed, the financial year 2020-21, we are out of all the high-cost inventories. And, as you are seeing the steel industry, which is doing well since last two quarters and there is an increase in their capacity utilisation and our demand has increased. The prices of the electrode have bottomed out in Q4FY21 and we expect that in this quarter (April to June) onwards, there will be an improvement in our margins. And, as I was saying about the high-cost inventory that we had is more or less liquidated now. A small tail-end is there but it will blend with the new raw material. So from this quarter, I can say that we will operate at 85% capacity utilisation, while our average stood at around 70% last year, in which the first quarter of FY2020-21 was very down and it improved gradually. Q4FY21 was the best quarter from the point of view of sales and believe that we will continue with that rate this year on a quarter-on-quarter basis.
Q: There are some unverified reports stating graphite electrode prices are up by 30% in China, we would like to understand the current prices compared to last year and what upside is expected in it?
A: I do not comment on the specific number but I definitely believe that the prices have increased in China as well as the rest of the world. In this quarter (April to June), we are seeing an improvement in the prices.
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