Graphite Industry and Price Update
- Syrah Resources downgrade Q4 production target after Balama fire
- Graphite prices stable ahead of seasonal slowdown; marginal price rises expected approaching end of the year
- Anode majors announce revenue growth amidst tightening margins; higher raw material costs limit profits
- Shanshan Tech begin construction at new 100,000 tpa anode facility, due for first production by April 2019
- Investment continues in Inner Mongolia as regional governments seek to expand China’s graphite production
- Imerys place Namibia project on care and maintenance
Graphite Price Commentary:
According to Benchmark Minerals Intelligence:
Flake graphite prices were stable throughout October with the Benchmark Flake Graphite Index unchanged. Minor decreases were seen across larger-flake/ high-purity grades with fewer sales at premium prices. The price of flake, 96-97% C, + 80 mesh fell 1.2% to an average of $1,250/tonne.
Elsewhere medium flake grades began to see some uptick in seasonal purchasing causing minor increases in 94-95% C pricing. -100 mesh prices increased 0.6% to an average of $800/tonne while +100 mesh prices rose 1%.
With Chinese production closures imminent and ongoing restrictions on processing in the country’s main areas of production – Shandong and Heilongjiang – any significant uptick in demand threatens to force a response in pricing.
Few are anticipating a major uptick however, with industrial consumers committing to similar volumes for 2019 contracts and value-added processors reporting sufficient short-term supplies.
One area of the market that may experience some further pressures is the large flake sector which despite increased production has struggled to keep pace with demand from expandable graphite applications. Increased production from Madagascar is looking to address this potential supply deficit, however today supplies remain tight and a significant premium remains for larger flake grades. The price of +50 mesh, 94-95% material remains up over 17% since the start of the year while the equivalent price of 96-97% material is up over 15% ytd.