Graphite Industry and Price Update
The following is an update from Benchmark Minerals Intelligence.
- Flake graphite prices stable despite seasonal production slowdown and purification cost increases in China.
- Syrah Resources report increased recoveries at Balama project as company confirm latest major offtake; first spherical production announced at Louisiana facility.
- Chinese flake graphite imports continue to rise, climbing above 50,000 tonnes in November (ytd).
- China/US trade war threatens slowdown in domestic industrial demand; industrial orders stable for 2019.
- China’s automobile industry investment regulation change expected to encourage further investment in domestic battery industry; EV battery import tariffs increased.
Flake Graphite Price Commentary:
According to Benchmark Minerals Intelligence:
Flake graphite prices remained stable approaching the end of the year, resisting the typical seasonal response to China’s slowdown in production.
The Benchmark Flake Graphite Index climbed marginally with some sales towards the higher-end of ranges for 94-95% C grades, however industry sources have voiced concerns that lower-value grades could come under renewed pressure moving into the New year as a result of new low-cost supplies entering the market.
In addition to Syrah Resources’ expansions in Mozambique, Madagascar has seen substantial increases in production, with both countries becoming key import markets for Chinese processors throughout 2019.
As a result of this evolving supply structure, the impact of China’s winter slowdown has been marginal, with bigger pressures coming from the ongoing environmental restrictions and input cost rises which are affecting Chinese cost competitiveness. This pressure is still yet to be reflected in high-purity (96-97%) prices, which have registered gradual decreases since H1 2018. +100 mesh prices have fallen 2% since January with +80 mesh prices down 3.8% ytd (FOB China).
A similar gradual reduction in prices has been seen across larger flake prices, which peaked in the middle of the year, with +50 mesh prices down 1.2% and 2.4% on average for 94-95% C and 96-07% C grades respectively.