Things are not always what they seem on the surface, in the graphite world. The "basket price", referred to by Brewbeck, is a good example.
Basket price is actually an assumed price, used in the development of a Feasibility Study. It is a conjecture, and something of a heroic assumption, namely, that the price achieved on the market today, for a very small volume (for large flake), is a good indicator of what the price will be, in three years time, when the volume available to sell will be ten or more times larger. There's a lot of water to flow under the bridge before that one gets resolved - and, of course, all graphite is sold at the actual price ruling at the time of delivery.
Both MNS and SYR have demonstrated that they can produce natural graphite which can replace synthetic graphite in what is likely to be the most significant application - coated spherical graphite for lithium-ion batteries, in electric vehicle and storage applications. However, an Internal Economic Assessment of a proposed Spherical Graphite plant in the US suggests that their costs may be substantially lower, with a net production cost (after recarburiser credits) of US$2750 per tonne, for coated spheroidal graphite.
Brewbeck's claim that SYR will only be selling refractory grade graphite to China is an unlikely assumption, and, interestingly, will be tested within less than a year, when volume shipments commence. Only then will we really know which countries are buying, and for what applications.
Cheers,
Prime1
MNS Price at posting:
56.5¢ Sentiment: None Disclosure: Not Held
