Q2 2014 outlook - Graphite trends

By Andrew Miller
Published: Wednesday, 16 April 2014

Downloadable: IM Data summarises the trends which defined the graphite market in Q1 2014 and looks ahead to what's in store for the industry entering Q2

A muted start to 2014 saw graphite prices linger at four year lows throughout Q1, as demand failed to live up to seasonal expectations.
 
Anticipation that prices would increase approaching China’s Spring Festival proved unfounded, despite many suppliers cutting back inventories as early as mid-January.
 
Chinese supply was further stifled in January with the news that graphite production in Pingdu, Shandong province, had been suspended on environmental grounds.

The shutdown of China’s 3rd largest flake graphite producing region was an unprecedented step for the Chinese authorities, raising concerns over the future of Chinese supply. Further environmental issues have been highlighted in Heilongjiang, the country’s largest producing province.

Shandong’s importance, particularly in the production of larger flake grades, is likely to see price increases over the coming months as expected growth in the steel sector exposes the cutback in output.

Although many held back from the market in Q1, one country which is likely to have increased consumption of flake graphite is Japan, as interest from domestic buyers increased ahead of consumption tax rises on 1st April.

This will not, however, translate to the amorphous graphite sector – a market which Japanese consumers have pulled back from in recent years.

Amorphous graphite demand followed on from a weak 2013, with some sources suggesting prices had entered the year evenlower than initially expected.
 
Similarly slow trading conditions were experienced in spherical graphite markets, leaving prices unchanged in Q1.
 
This comes despite plans announced in February by Tesla, that it plans to create a new ‘gigafactory’ for lithium-ion battery production which could potentially double the size of the spherical market.

Elsewhere, the Sri Lankan government made its annual announcement of vein graphite prices in January, electing to keep prices stable for a third consecutive year.

Download full outlook here



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