Interesting read re graphite & potential upside to what MVL is sitting on. Article posted on Sm@llCaps - titled "Graphite could be poised to ‘do a lithium’By Tim Treadgold - December 1, 2022" Google title if you want to access full article but some key paragraphs:Graphite market approaches deficit
Fastmarkets started graphite revival speculation last month when it tipped a flip in the graphite market from a long-running surplus to a modest deficit by the end of 2022.
The change in the market can be traced to steady demand in traditional uses (such as steel making) and a sharp pick-up in demand from battery makers with Fastmarkets forecasting a rise in battery-sector demand from 210,000 tonnes last year to 300,000t this year.
Benchmark took up the graphite recovery theme in a presentation at a battery metals conference in Los Angeles earlier this month where the consulting firm’s chief operating officer Andy Miller said “there are signs of huge momentum building in the battery supply chain.”
“The events of the past 12 months are just a warning sign of what is to come across the raw material market,” Miller was quoted telling delegates.
But Miller also touched on an issue which has confused investors since graphite emerged from its grimy background in steel mills and as a crucible in a metal foundry into a battery metal play and that’s the multiple grades and pricing.
Demand rising
EcoGraf, which is developing a graphite mine in Tanzania and processing facilities in WA estimates every EV requires between 50 kilograms and 55kg of natural flake graphite, which boils down to 27kg of 99.95% high purity battery grade anode.
With demand clearly there, even if currently over-powered by supply, there is a tipping point not far away just as there was for cobalt in 2016, when battery demand exceeded 50% of the market and lithium in 2018, when it also crossed the 50% market share threshold with an ensuing price explosion.
Benchmark reportedly sees demand for graphite over the next decade growing at an annual compound rate of 10.5%, but with supply growth limited to an annual 5.7%.
Until now, the graphite market has been able to meet battery demand thanks to its much bigger supply base compared with lithium and cobalt.
Miller reckons that with the average graphite mine producing 56,000t of material a year there is a need for 97 new mines by 2035, along with 52 new synthetic graphite factories to meet demand from battery makers.
Those sorts of forward-looking estimates always need to be seen as a guide to what might (or might not) happen; but, with graphite there are two trailblazing metals showing what can happen when demand overpowers supply – lithium and cobalt.
Will history repeat and will graphite “do a lithium?”
Quite possibly if government bans on petrol and diesel vehicles are enforced and car buyers are left with no choice other than a battery-powered EV.
