By Laura Syrett, Shruti Salwan
Published: Wednesday, 22 July 2015

First half drops for graphite leave little room for further slides, with weak consumption by refractories spurring discounts. In the cerium market, the light rare earth hovering around $2/kg mark prompting producers to say the mineral doesn’t pay to mine.

Natural flake graphite prices continue to face soft demand, as industrial activity in the mineral’s major end consuming market, refractories, remains limited and erratic, with no signs of real recovery.

Prices do appear to have stabilised into July, although the present steadiness may only be temporary.

Data gathered from industry participants in India, Africa, China, Europe and North America show flake graphite prices levelling out, after trending downwards throughout H1 2015, where they fell across the board by 25-30% to levels not seen since 2009.

Some sources indicated that the problem is being perpetuated because Chinese traders are agreeing to the lower end of price negotiations in order to retain customers.

These pressures are increased by buyers, especially Japanese consumers, aiming to develop alternative supply sources and trading smaller volumes at bigger bargains, which has pulled prices down to current levels. 

While price volatility in the market persists for medium mesh grades and fines, large flakes are not resilient to these declines and are failing to fetch the premiums assumed by many graphite exploration companies, despite lower production capacity and tighter supply in China.

Mounting scrutiny of environmental standards is also impacting graphite operations in China – most notably in the major producing provinces of Heilongjiang, Shandong and Hubei. According to market sources, this could have a major impact on the medium-term supply dynamics of the industry.

Graphite, Flake, 94-97% C, +80 mesh, FCL, CIF Europe port, $/tonne 

price 1  

Graphite, Flake, 94-97% C, +80 mesh, FCL, CIF Europe port $1,050-11,50/tonne

Graphite, Flake, 85-87% C, +100mesh -80mesh, FCL, CIF, Europe port $550-600/tonne

Graphite, Flake, 90%C, -100 mesh, FCL, CIF, Europe port $600-650/tonne

Graphite, Flake, 94-97%C, -100 mesh, FCL, CIF, Europe port $750-800/tonne

Graphite, Flake, 94-97% C, +100 mesh-80 mesh, FCL, CIF European port $900-1,000/tonne

Graphite, Amorphous, -200 mesh, 80-85% C, China, FCL, CIF, Europe port $400-430/tonne

Graphite, Flake, 90% C, +80 mesh, CIF, Europe port $750-850/tonne

Graphite, Flake, 90% C, +100 mesh -80 mesh, FCL, CIF, Europe port $700-800/tonne

Cerium skirts new lows

Prices for cerium oxide (min. 99%, FOB China) are hovering around the $2/kg mark at the bottom of current price ranges, according to reports from Chinese producers, while CIF Europe prices are around $2.20-2.30/kg, having trickled down throughout June and into July.

Prices for cerium metal (min. 99%, FOB China) are in the $5-7/kg range, meanwhile, meaning that many refiners are losing money on the material.

According to IM sources, chronic oversupply of cerium, which is mainly used to make polishing powders, is keeping downward pressure on prices. 

Demand for the mineral remains strong, however, with the latest export figures from China showing a jump in shipments in May to 170.38 tonnes, up more than 310% year-on-year, with key buyers taking advantage of the lower selling values to up orders.

Trading houses in the Netherlands were the largest recipients of cerium in May, taking 170% more material than during the same month last year, accounting for a third of total exports.

Some market observers said that the only hope for the cerium market was a minimum 50% cut in production capacity, or the identification of new high volume end markets – although few expect the latter to materialise in time to rescue the majority of producers, if at all.

Cerium oxide, min 99%, FOB, China, $/kg, Bulk 

price 2  

Cerium oxide, min 99%, FOB China, bulk $2.1-2.5/kg

Dysprosium oxide, min 99%, FOB China, bulk $240-255/kg

Europium oxide, min 99%, FOB China, bulk $220-250/kg

Lanthanum oxide, min 99%, FOB China, bulk $2.1-2.5/kg

Neodymium oxide, min 99%, FOB China, bulk $43-48/kg

Praseodymium oxide, min 99%, FOB China, bulk $43-49/kg

Samarium oxide, min 99%, FOB China, bulk $2.5-3.5/kg