Assuming that non-qualified natural graphite will be sold in large quantities is a big risk and assumption as there a many factors including metallurgical attributes, FUSED ICP analysis, application chemistry compatibility, pricing, customer packing requirements, commercial terms, and potential consignment considerations.
There is also the fact that even if the new supplier is qualified, there will be a long lead time for current customer inventory draw down and the new supplier will not be given an majority of the business until they have proven they can meet initial target tonnages (limited shipments) and logistical timeline targets, all of which can take up to a year or more.
To think that the competition is just going to lay down and let the business just go away is foolish and cynical and rest assured the competition will react in an number of ways including the following to any new competition where the products are not unique and are supplied by many:
1. Reduction in prices or loss leader pricing of a higher volume product in a family of products (key factor)
2. Extension of existing sales agreements
3. Renegotiation of commercial terms (DSO's, Inventory Management)
4. Most of the competition have strategic and extensive relationships with customers where the customer
may have no interest in entertaining another supplier.
And importantly, even though the lab scale or pilot plant samples have been qualified are only indicators and once the plant has been built, commissioned and calibrated, the commercially produced concentrate will have to be confirmation qualified again that it indeed does perform and mimic the list of factors listed above. If it does not, and I have seen this happen on many occasions over the last 3 decades that the commercial processing does not produce the same graphite concentrate that was previously qualified from lab samples and now, back to square one.
Producing significant amounts of inventory in packaging that may or may not meet a large number of customer specs, producing grades that have global pricing lower than the ASP targets by a graphite producer, producing grades that may have limited global demand (there will also be fines produced in any commercial production), and finally not have a contingency plan to deal with high volumes of unqualified inventory and ultimately having to focus on low price, high volume markets to move product, thus sacrificing margin and cash flow.
Finally, to obtain any take or pay sales or supply agreements will require commercial production qualifications to be completed. This is the preverbal chicken or the egg theory, yet to obtain any debt financing will be highly unlikely without take or pay agreements, but until the plant is built and production commercially qualified, will be an illusive goal.
These are the facts of the graphite industry and to assume that all natural graphite is homogenous across all signatures in metallurgy with flake size variations as a key factor, proves the cynical nature of thinking that entry into the global graphite market is a cake walk following the old adage, "build it and they will come".
It is incumbent on all to fully understand the graphite industry and all of the requirements of qualifications by any end user application / industry on ANY graphite supplier and the uniqueness of the target applications including the complexity, government or international regulations including safety, and any international certifications required to be able to supply specific applications (i.e. ISO, CE, UL, etc.).
From current indications, research and company annoucements, not one start up has achieved any ISO 9001 or 14001 certs to begin supplying commercial concentrate to any critical application as this a requirement by many applications and industries. A graphite company my claim to be ISO compliant, but that claim and $2 will buy you a flat white anywhere.
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