Bluey, thanks for your thoughtful response. Like you, I believe...

Bluey, thanks for your thoughtful response. Like you, I believe that the companies which are contracting for product now are planning well into the future.

The problem is the price they will ultimately pay for the product. For a very simple example, let's assume we have two products, large flake, which we will say sells currently for $3000 per tonne, and fine flake, which sells for for $1000 per tonne. (I emphasise, these are artificial examples). If we have half large flake, and half fine flake, then our "basket" is worth $2000 per tonne. Let's also assume that fine flake demand continues to rise, matching supply, and the price stays at $1000 per tonne.

But what about our large flake? Without new applications, demand does not change, as supply increases, and the price drops to, say, $1500 per tonne. Our "basket" is now worth just $1250 per tonne.

So what really changes is what the customer ends up having to pay for his graphite. The basket price reflects world prices at the time of delivery, not the price today. And a big surplus of large-flake graphite will not do good things for the world price.

The uncomfortable question remains:

Where are the new applications which will consume the large-flake graphite, at a significant premium to the fine-flake product?

Cheers,

Prime1