HEG shares add another 10% to hit six-year high on China's graphite control

Aside of tighter export norms for graphite, China will no longer allow gallium, germanium and antimony to be shipped to America, a statement by China's Ministry of Commerce said on December 3.

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26 Aug, 2025 12:21

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China's decision to impose tighter control on the export of graphite, a key ingredient in batteries and steel manufacturing, has sent the share prices of electrode makers HEG and Graphite India soaring, with gains extending on December 4 following double-digit moves a day before.

Shares of HEG and Graphite India were higher by 10% and 6% respectively in early trade on December 4, with HEG reaching its highest level in six years. Since the closing price of Monday, shares of HEG are higher by close to 28%.

China, world's leading producer of graphite, said any shipment to US will undergo stricter review of the intended use, as per the notice issued by China's Ministry of Commerce this week.

Apart from HEG and Graphite India, there are two major competitors the world over in the business that have roughly double the capacity of the Indian players. One, GrafTech International, erstwhile Union Carbide, and a Japanese company called Showa Denko, now called Resonac.

Read More: Shares of electrode makers HEG and Graphite India soar: What's the trigger

One Hong Kong-based news publication quoted a Chinese commerce ministry official stating that the US has over-generalized the concept of national security, and weaponized trade and technological issues. The export restrictions by China came after the US imposed fresh curbs on the sale of certain memory chips as well as chipmaking equipment to China.

"China has lodged serious protests with the US for once again updating the export controls on semiconductors and sanctioning Chinese companies, and maliciously suppressing China’s technology progress," The Chinese foreign ministry spokesperson said on December 3.

Read More: US chips are 'no longer safe,' Chinese industry bodies say in latest trade salvo

Aside of tighter export norms for graphite, China will no longer allow gallium, germanium and antimony to be shipped to America, a statement by China's Ministry of Commerce said on December 3. These metals are used in semiconductors and satellites, and the export restictions are likely to push up the international prices of the metals higher.

Graphite electrodes are used in the steel industry and have become increasingly important in lithium-ion batteries, used by the automotive sector. According to Statista, the global market value of graphite is projected to reach $38 billion in 2028, from approximately $14 billion in 2022. It quotes forecasts that project the market for lithium-ion batteries crossing $100 billion by 2025 as demand for EVs increases.