understanding the future, page-3

The death of the US economy has many implications, it means countries like China are stockpiling things like gold. http://www.bloomberg.com/news/2014-02-25/gold-near-16-week-high-as-rally-seen-overdone-on-taper-outlook.html

IMO knowing the ups and downs of any industry and how the world is going to react to major shifts in demand and power is significant.

"It depends on the company, whether it is coming from an industry perspective or, like most of the juniors, from a stock market perspective. From an industry perspective, the hope is to move away from dependency on China. Graphite buyers need supply security; the price volatility of the past five years has not been good for business. For a company producing refractories, raw materials are by far the biggest input cost, and price volatility does not allow for long-term business planning. For long-term supply security, companies are looking away from China." - Simon Moores

Changing sentiments are driven by the rapidly expanding and changing technologies. Not all Graphite companies are equal. High-Grade demand can truly compete against China; IMHO the speculation here is based on years of evidence and land that has not been touched since the 40's.

"You never quite know in this space, but I think the worst is over. I think we'll see improvement in 2014 for everyone in the graphite industry. The fundamentals haven't changed since the boom of 2011: China still dominates. New supply is needed for high-tech markets, which are competing with the traditional steel refractories. No new mines have been built since the 1980s.

Add on to that the diminishing supply, given the new situation in Pingdu, China. Supply, especially for large-flake, high-purity grades, is tighter. Premium products—large-flake, plus-80 and bigger, at purity levels of 95–99% carbon—will be in demand.

We should see some price improvement as well. Usually, when prices improve, that sentiment translates to the rest of the industry. That gets reflected in the investment arena. If that happens, it should encourage more people to return to graphite investing, because the fundamentals are pretty clear." - Simon Moores

Everyone who remembers the boom of 2011 - Hold onto your hats...

Kind Regards