Tension between US and China over Graphite turns into a boon for this Indian company as its shares cross…

The United States and China’s relations have deteriorated in the past few months. The US has increased the duty on Chinese products and it is being seen as a major setback to dragons. Responding to the step taken by the US, China has also banned supply of graphite to the United States. 
After China’s announcement, India’s listed company HEG has gained a major advantage. The company’s shares surged by 30% in the last two days and have reached their highest point in the last four years, though they are still far from their all-time high. On Wednesday, the share price increased by 12.02% and traded at Rs 560.70.
Graphite is a material that is used in several major projects. It is mainly used in batteries, electrodes of electric arc furnaces and in manufacturing of steel and glass. It is also used in high-temperature industries as refractory,  Anode content in Lithium ion batteries and to stabilize in nuclear reactors. 
Of late, China has restricted graphite export to the United States which has enhanced the tension between the two nations. The industry will suffer and it will impact the supply chain.  Its repercussions could be witnessed in the form of surge in production cost and delay in deliveries. The American companies will be forced to explore alternatives and they will increase the prices of electrodes due to unavailability of graphite. 
The HEG company manufactures graphite electrodes and earns 80% revenue from it. China’s decision will give an advantage to the companies which deal in graphite and HEG is also among them. 
In 2018, the company ‘s share had touched an all time high of Rs 991. Later , it witnessed a major drop in 2020, while registering its lowest record of Rs 81.90. However, the company’s fortune turned and it recorded a high of Rs 525.80.