Surging graphite prices (bull market actually)

I thought a new thread, one not going on about the same proposed policy change which I’m sure every holder is acutely aware of, and heard about a thousand times, from a thousand different angles, was in order.

The biggest story out of graphite in recent times isn’t Tanzania and their posturing with Acacia Gold. No. The biggest story out of graphite is; “Price increases over the last month of up to 20% for large flake graphite produced in China” & “New regulations under China’s 2016 Environmental Protection Tax Law to be implemented from 1 January 2018 that are expected to increase the cost of graphite produced in China, which currently accounts for over 70% of global graphite production. These changes are forecast to support graphite product price growth across all markets as the higher environmental standards become more widely adopted in China.”

You only need to look at the recovering iron ore and coal prices to know China is serious about cleaning up their country. Iron ore and coal prices have largely increased because China began mothballing smaller, costly and more ‘dirty’ (as in coal) mines. Keep in mind this is a complete turnaround from their previous policy of subsidising their inefficient mines to avoid dependence on foreign countries. The magnitude of their policy change should not be understated. It is a complete about face for China. It has supported iron ore and coal prices, and obviously as the largest graphite producer, by leagues, graphite prices.

All this means the theory that China might/would flood the market with cheap graphite to kill off any competition is in the process of being resoundingly disproved.

Not only that, but overnight the U.K. joined Germany, France and China (earlier, and independently of each other) in confirming an end to diesel motors (I think by 2040). That’s 4 of the 6 largest economies in the world confirming a legislated push to EV’s.

The BFS also doesn’t take into account the recent graphite price rises. Although I do hope an updated page has been sent to KfW Bank and Nedbank confirming the new prices because a 20% rise in our basket price, and rising, is much more important to KfW Bank & Nedbank than a 16% loss (on a worst-case scenario) of the Epanko tenement.