Graphite Industry and Price Update

The following is an update from Benchmark Minerals Intelligence.

Industry Commentary:

  • Flake prices continue to decline as oversupply fears mount; Benchmark Graphite Index falls 3.6%. The biggest decreases were seen across finer flake (-100 mesh) grades which fell 7.8% for 90-93% C material and 9.4% for 94-95% C (FOB China).
  • US raises tariffs on Chinese graphite imports; exporters to target increased sales into Europe
  • Syrah stands firm on 2019 production targets, reporting positive market uptake
  • XFH looks to raise $72m for 30,000tpa anode project; Tianquan county government sign agreement with Fu An Holdings for 40,000 tpa anode capacity expansion
  • VW commits to battery production facility; European Battery Alliance to invest up to 6bn euros to support regional battery production, adding to Farasis’ Germany plans
  • BYD sales strengthen despite subsidy reductions, faces possible backlash from trade tensions
  • China’s April NEV output climbs 25% as industry awaits the fallout from subsidy reduction in H2s and Black Rock Mining; Nouveau Monde signs 25,000 tpa flake offtake with Traxys Group

Flake Graphite Price Commentary:

Graphite Price

According to Benchmark Minerals Intelligence:

Mounting oversupply in the flake graphite market saw further decreases in pricing throughout May 2019, with the Benchmark Flake Graphite Index falling a further 3.6%. The biggest decreases were seen across finer flake (-100 mesh) grades which fell 7.8% for 90-93% C material and 9.4% for 94-95% C (FOB China).

Some prices have been reported at below these levels, however, this is understood to be for fake flake or off-spec material which is becoming increasingly prevalent in the market with increased volumes of low-quality material being made available at discounted rates.

Pressures for finer flake grades have been compounded in recent weeks by increased Chinese production and the low-price sales into China from Mozambique. Competitive pricing in the Chinese market will lead to increased volumes being offered into export markets, particularly into Europe which Chinese exporters are targeting for volumes that have become less competitive into the US as a result of increased tariffs.

Prices in May 2019 reached their lowest point since H2 2017 on average, and many expect supply-side pressures to force further decreases in the short-term.