Graphite: 2014 price outlook by Charlotte McLeod ...
At the moment, the main factor with the potential to move graphite prices is the fact that as many as 55 graphite miners and processors in the Chinese town of Pingdu have been ordered to stop producing flake graphite on environmental grounds.
Announced midway through December, the stoppage is expected to remain in place until June 2014, “or until the companies can prove an acceptable standard of environmental controls,” Moores said in a recent article. That’s significant because it is expected to take 10 percent of the world’s flake graphite supply — equivalent to 20 percent of China’s domestic production — off the market.
That supply loss, Moores notes, coincides “with the annual winter shutdown of China’s graphite producers,” which close their doors between November and February. As a result, the immediate impact is likely to be minimal, with ”the strength of the demand rebound after February … dictating the future direction of prices.”
On a similar note, Berry told GIN that the news, combined with “an improving global macroeconomic picture,” could result in higher flake graphite prices in 2014. Speaking further on his outlook for next year, Berry said that while 2014 will “be another challenging year for graphite exploration plays,” he believes “we are at the bottom of the cycle.” From here, he sees company CEOs getting “more creative in bolstering their balance sheets” even as the challenging market environment reduces the number of graphite explorers out there.
However, “the real move higher in graphite likely won’t come until the 2015-2016 time frame” when “a mixture of steady demand for graphite runs head first into a China that continues to grapple with higher costs and environmental damage (hindering supply) and higher graphite prices attract financing opportunities (through both equity and debt) back into the space.” ...
