Ravi Jhunjhunwala earnings call questions

HEG Limited CC-May26.pdf · 2026-05-04

Manish, will you take this question?

Just to add, these European steel companies basically have no option. I mean, as you all know, electric arc furnace emits about 25%-30% of carbon as comp ared to the same steel produced through blast furnace. So, with the CBAM and ex-Euro per ton duties and everything that Europe is applying now from 1st of July, whether the cost is x or x plus something, they will have no option. There is no way that they can pay that kind of CBAM duty and still be able to export their steel. So, they will have to shift from blast furnaces to electric arc furnaces already. Europe is already 50%-55%. And Europe is adding at least 25-30 million tons of electric arc furnaces. Some of them have already come in. Some of them are under construction. So, by 2030, according to our information and we believe this figure is more or less accurate because we are exporting 70% of our products to all parts of the world. So, people are always on the road meeting this customer here and that customer there. So, close to 100 million tons of new electric arc furnaces are scheduled to come in, out of which 20-22 are already in operation. And we believe about 30 million tons is going to be operational within 2026, 2027, and 2028. And another 30-35 million tons in 2028 and 2030. So, that adds up to about 100 million tons. And that requires a lot of electrodes. And excep t our expansion, there is nobody who has even announced anything as yet. It takes two to three years to even make a small Brownfield expansion, as you know, in our case..