Hey JSSF....to provide background and new graphite project activities, the hyper demand narrative for EV's have never materialised and CSPG was only introduced in 2013 when China made a concerted effort to move to EV's. Primary synthetic anode grades were in short supply, so CSPG was the next logical option. The battery performance when blending CSPG with primary synthetic did not performance as well as singular primary synthetic graphite. Despite all of high praise, the natural flake graphite CSPG is a flakey morphology whereas primary synthetic graphite can be produced in a range of morphologies, tap densities, PSD's, for many battery chemistries and formats. Natual graphite CSPG demand has fallen off over the past 2 years as EV demand has slowed and increased capacity in China to produce primary synthetic graphite anode grades at a much lower cost that natural graphite CSPG. Something else to consider is primary synthetic graphite production can be considered a recycling operation by taking coke and binder products from oil refining, graphitising the green mix using renewable energy, creates a very sustainable model whereas natural graphite production requires significant open pit mining operations, concentrate production, purification, micronisation, SPG processing and finally coating is a multistep process that primary synthetic graphite anode production does not have. Any pro-pundit EV types will disagree, but numbers do not lie no matter how you spin them.
Also, not one new natural graphite project has come online solely on the basis of EV feedstock or CSPG production. China is the ONLY country that produces batteries for EV's using natural graphite. All other automotive OEM's use primary synthetic graphite anode grades including Rivian, BMW, MB, and others. Have you ever asked as to who the hyper demand for natural graphite has never materialised? Benchmark and Fastmarkets are two third party marketing firms who have let the hype on EV demand with a ridiculous claim the industry will need 90+ natural graphite mines in the next 10 years, yet there is ~ 1,000,000 Mt of potential new natural graphite production in the planning, exploration that will probably not reach funding any time soon as the automotive industry does not support such hyper demand.
Natural graphite and primary synthetic graphite in general is abundant in availability in supply and why pricing has not reached predicted levels. Yes, there are tariff considerations in play now that will affect export pricing from China to the US, yet there are still export restrictions from China that affects pricing and delayed transit times. Also, there are many other legacy graphite powder operations that have been in existence up to 140 years that have weathered many global and macro-economic changes over the decades, and they were able to adjust business models, expectations, and revenue streams, hence why they still exist today. I have been in the graphite industry since the early 1990's and the hubris displayed by every new natural graphite project is disappointing as you cannot bank all of your natural graphite production success on a concept or potential event and not develop progressive and diverse revenue streams. ALL graphite powders have to be qualified and not every natural graphite signature will qualify not matter how much you want it to. There are many applications that DO NOT require SPG processing that could be pursed by new graphite projects, but most investors wear blinders the business model does not include EV's, yet profits are considerably higher for non-EV applications including traditional applications in every region around the globe.
The one natural graphite project (SYR) that has not only significantly hindered the equity market, but in general harmed the graphite industry with the business model of quantity of quality crashing the market for at least 18 months by introducing ~ 40% new flake graphite supply believing the EV battery industry would absorb the new supply, Yet, prices were depressed to ~ US$ 350 Mt CIF causing SYR to put the operation into C & M for ~ 18 months and since then, have yet to achieve more than 25% production capacity and has yet to turn a profit since inaugural commercial production began. In addition, SYR's Vidalia SPG plant in the US has produced < 5 Mt of product in the past 3 years even with MOU's in place that also will probably never come to fruition.
Another example is RNU who has more than AU$ 100 million in cash, yet they have no viable pathway to commercial production as demand for CSPG has slowed and demand is being filled by primary synthetic anode grades and it will be years before they ever break ground on a new mining operation. Included in the narrative of unlikely production is the metallurgical profile of the RNU project as being ultra fine with a very narrow path to commercial qualifications not including electrochemistry applications. Even though Benchmark publishes a couple of anode grades, there are in reality many anode grades and types with prices ranging from US$ 6,900 Mt FOB Port (EV Anode Grades) to more than US$ 22,000 Mt FOB Port for NON-EV applications. It is important to note that China is the ONLY country that uses USPG grades as they will send the USPG grades for further coating processing.
On the positive side of the narrative, demand for E-bikes, ESS, and Therma Energy Storage is growing, yet no new project has made any effort to pursue as it does not meet the ultra-hype of EV narrative. All of the new graphite projects are a business where they are accountable to their investors to make money and follow a commercially sustainable existence and believing they will all qualify for EV batteries is misguided and not industry reality. I have done new graphite project assessments for many investors in the past and once they have all information on the graphite powder industry, average price points for all applications, and detailed information on target applications by a new project, they come away with a perspective that provides facts that are in stark contrast to the hype, Benchmark, and Fastmarkets unqualified battery industry narrative. The majority of new graphite projects spending hundreds of thousands of dollars on their party battery qualifications, yet NO Automotive OEM will use third party lab results to move to commercial qualifications of a new anode supplier, but in reality, any new anode graphite grade must be qualified in the specific battery chemistry and format which may take up to 3 + years.
I expand further based post your read of the above information with additional comments or questions.
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