Graphite outlook: Q3 2014
Published: Friday, 04 July 2014
July 2014 - Graphite trends
Flake graphite prices remained stable moving into Q2 2014,
however news of further Chinese
consolidation plans soon applied upward pressure to the
market as the risk of longer term supply issues increased.
In mid-April 2014, Heilongjiang the
largest flake graphite producing region in China
announced plans to begin a programme of
consolidation which will run through to 2020.
These plans are focused on eliminating environmental pollution,
reducing the number of active producers and enforcing industry
entrance standards to increase productivity and efficiency.
As a result of this news, Chinese suppliers attempted toleverage higher prices
in early May, increasing their offers by as much as
While weak demand prevented deals being settled at these
levels, increases were evident throughout May, with prices
eventually settling at around $50/tonne
higher by the start of June for medium-large mesh grades.
Lower value grades proved more resilient to
this trend, however, as excess output continued to weigh
heaviest on this area of the market.
Although output from Heilongjiang province slowed throughout
the quarter to combat overcapacity issues, production is
expected to ramp up once again in Q3 2014, which could see
prices slip back to previous levels if summer consumption fails to
As attempts to use supply restrictions managed to finally lift
flake concentrate prices from four year lows, increases failed
to filter through to the spherical graphite market.
IM Data sources reported higher offers in the region of 5-10%,
however this failed to stimulate price increases despite
resilient demand and the ongoing excitement surrounding Teslas plans to open
the worlds first battery gigafactory.
In the amorphous graphite sector, prices slumped by as much as
18% throughout Q2 as Chinas sole producer, South
Graphite, lowered prices to clear
existing stockpiles and regain market share, particularly
With the country accounting for around 90% of global
production, the move has made the market increasingly difficult
for peripheral producers who are having to compete with lower
carbon substitutes in many markets.
Elsewhere, Sri Lankas Ministry of Industrial Commerce has
begun a review of its annual pricing
strategy, as weak market conditions have forced producers
to consider lowering prices which have been stable for over two
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