Re the spherical graphite issue, you recall recently raising jaberwock's work from seeking alpha (Post #:
13933193 North American view). It seems he is now suggesting the pricing used in another article (the price was also used by SYR in their ann - i.e. $7,000 to $10,000/tonne price) is well over the top, has dropped considerably and now sells for $3,000 to $4,000/tonne.
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My own findings in researching the graphite market are more or less in line with your conclusions. There is definitely no shortage of graphite in the world. Although some new mines will have to come on stream to provide the extra supply if Li-ion battery use grows as forecast, only two or three of the current crop of prospects are likely to ever develop a producing mine.
I would like to point out that your $7,000 to $10,000/tonne price for spherical graphite dates back to the days when flake concentrate was selling for $3,500/tonne. Prices have now dropped, in line with concentrate prices and spherical graphite now sells for $3,000 to $4,000/tonne. When you think about it, the cost of concentrate at $1700/tonne, with a 50% yield and $500/tonne processing cost will work out to $3,900/tonne minus a credit of $700/tonne if you can sell the waste as fines. It makes sense that spherical prices will always correlate to concentrate prices, and there will only be a small profit margin attached to making spherical graphite from concentrate. Those mines that are pursuing the value added route may be able to squeeze a bit of extra profit to include in their feasibility studies and boost their NPV, but value added processing will never make a poor mine into a good one.
http://seekingalpha.com/article/287...art-1-supply-demand-overview#comment-47994236
Interesting also were the freight costs suggested by the other expert you quoted on another thread - Ben Kramer-Miller. If SYR do develop a spherical graphite plant in the US (as well as in MOZ) it means first they will ship some of the graphite from MOZ to the US, where it will be spheroidized, then it could be shipped to the battery manufacturers, who largely are located in Japan & Korea. Yes, we all know the Tesla Gigafactory is located in the US, but at this stage there is nothing to suggest SYR graphite will be used in the US by Tesla. Now all that shipping to and fro is going to add considerably to the cost, if those rates mentioned are correct. Therefore, taking into consideration both these points made, is going down this spherical graphite "path" really going to be that profitable?
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Graphite isn't exactly a local market but as a lightweight material that can be expensive to ship by boat (tankers charge by volume) it makes sense to look at the graphite market at the local level. According to an industry source it will cost ~$5,000 to ship a 20-foot container, which can hold 13-15 tonnes of graphite. At current market prices that means it will cost $5,000 in order to ship ~$13,000 - $18,000 worth of graphite, which is clearly significant. On a per-tonne basis this comes down to ~$400, which is what the most efficient companies are estimating their operating costs will be.
In short, shipping will destroy profit margins for companies that are forced to do so.
(20min delay)