Hi Utrade1234. Thanks for your questions. My understanding of the situation, in regard to each of them, is as follows:
1. Sorry I cannot provide a link to the Credit Suisse report. It is a client document, but, if you contact them, they may very well oblige.
2. I did not suggest that Fielde commented on SYR's ability or otherwise to meet demand. That comment was from Credit Suisse, and was appropriately attributed, as follows:
"Credit Suisse clearly believe that this fine-flake material is largely planned for use in the lucrative new application area of Li-ion batteries (with some for the recarburiser market). Indeed, they comment:
"It appears highly probable to us that SYR's phase 1 production plan might not produce sufficient graphite to meet customer demand, particularly if the aspirations of the battery makers follow their projections".
3. Quite right. However, the recent MOU with Marubeni is indicative. As the relevant announcement says:
"Marubeni has close relationships with all the major battery producers in Japan and Korea, who are currently the world's largest producers of Li-ion batteries."
4. I think we are all aware of the serious, and increasing, quality problems being experienced by many of the Chinese producers. The cost structure at Balama, for both mining and concentrate production, has already been indicated to be probably the lowest in the world. Nobody is suggesting that any company will gain 100% market share. However, equally, it is true that if a company is able to offer a product, meeting all specification requirements, at a lower price than its competitors, they are likely to win a lot of the business.
5. Good to hear that MNS will sell their product to their offtake partners, as per the agreements. I wouldn't disagree with that for a moment. The problem for MNS, and this is the primary thread of my post, is that there appears to be nothing at all in the "binding offtake agreements" as to how much the Chinese offtake partners will pay, at the time of delivery. The announcement merely refers to a "current market price" for the basket, whatever that may mean. The Credit Suisse report simply suggests that they have healthy doubts about the price-by-flake-size assumptions in studies by several graphite miners, not just MNS. If CS are correct, then MNS appears to be more exposed than most, because of the small proportion of fine-flake graphite in their basket, limiting their ability to sell into the lucrative battery-grade market, and limited to an increasingly over-supplied large-flake market. That seems to be why Credit Suisse appear doubtful of the assumed future high prices for large-flake.
Hope this answers your questions.
Cheers,
Prime1
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