Legacy graphite projects produce ~ 5 to 7 standard ASTM Mesh Products with varying purities from 90% to 98% LOI and that range of products are qualified across a wide range of applications. Any specialty requested grades (i.e. +695 (20x60)) is made to spec grade and requires a take or pay, where all other grades listed earlier are readily available from a number of graphite producers and prices are not publicly available.
You mentioned traders as experts? They are in the business of negotiating deep discounts from suppliers for a range of ASTM Mesh Grades from 20% to 40% off China FOB pricing on average and then mark up to cover their costs and profits which makes pricing also unreliable due to the variability, etc. Why would a trader or reseller provide their pricing intelligence to a producer? It is not logical.
I've read other DFS' from other new projects (i.e. Black Rock, Graphex (now Evolution)) and their marketing sections were ~ 80 - 90 pages covering all target markets / applications both traditional and advanced products w/ target products / specs / pricing, etc. These two examples are in stark contrast from most DFS' with marketing sections having 3-8 pages.
When addressing forecasting of graphite pricing, I refer to pricing volatility from 2007 to 2011 where +595 was selling for ~ US$ 750 CIF in 2008 and reached a high of ~ US$ 3,300 CIF in 2010. There is no way any graphite producer or end user could have forecasted that level of price increase. In 2003, IMERYS' Canadian Plant has ~ 22,000 MT of fines (-1592 & -2093) in bulk bags in an open field...they unloaded ~ 15,000 at ~ US$ 200 - US$250 MT FOB; Asbury purchase the majority of the fines.
The point being made that graphite can see volatility at any time and for any new graphite project to foolishly forecast they will sell from 50,000 to 300,000 MT of new supply into the industry indicates their naivety to the dynamics of the graphite market and not understanding the qualification timelines, etc. Syrah is a prime example of what happens when you flood the market with less-than-ideal quality graphite, where there is market is in equilibrium. There is no feasible way for the graphite market to absorb 50% new supply. The result was significant price degradation across the fine and medium flake prices.
Finally, in the graphite industry the term "Basket Pricing" is only used by new projects managed in part by financial background teams. Graphite is homogeneous across all grades defined by mesh size, PSD, or purity. The term Baske Pricing is used in consumer grocery basket average prices, and / or applicable for financial instruments or basket pricing. That term and other non-industry terms such as Super Jumbo, Colossal Jumbo, XXL, or XL, where introduced by non-graphite industry management personnel around 2013. There are only three categories of graphite flake; coarse, medium, and fine. No end user will use non-graphite terms, but order based on ASTM Mesh Size Grade / Purity (i.e. +597, +895, +198, -894).
I have been in the graphite business for ~ 30 years I have spoken BEM Sr. Mgt. on a couple of occasions and there is much to learn beyond the battery hype and other factors that are integral to the success of any graphite project.
BEM Price at posting:
9.7¢ Sentiment: None Disclosure: Not Held
