Fastmarkets has strengthened its pricing of the natural
graphite market with the launch of six flake graphite price
assessments, in response to market feedback and changes in
Fastmarkets, and Industrial Minerals previously, has been
pricing graphite for more than 30 years, with the first
assessments introduced in 1988.
During this time, it closely tracked the graphite boom of
the middle 2000s, which saw a flurry of demand and market
prices surging in the periods 2009-10 and 2011-12. Anyone
involved in the market will remember that the market then
responded with a new inflow of supply, particularly from China,
until the market collapsed.
The international trade found itself dogged by oversupply
and experiencing a contraction in demand, and the prices of all
the main graphite grades (including flake, amorphous and
spherical) went through a prolonged bear phase that lasted from
2012 until around 2017.
By that time, supply disruptions in China, related to the
country’s environmental policies, and a combined
return of demand from the main consuming markets, helped to
raise market prices back to more sustainable levels.
Approaching the second half of 2019, new supply patterns are
putting downward pressure on prices once again, and market
participants are eager to see whether a supply/demand balance
can be maintained.
Throughout the years of upheaval, Fastmarkets’
pricing assessments for flake graphite consisted of a number of
grades that were brought together into combined price
For example, a price range for graphite, flake, 94-97% C,
+80 mesh, US$ per tonne, cif Europe, would provide an
assessment for any flake graphite material, at that mesh size,
with a carbon content ranging from 94% C to 97% C.
This was the structure that the main flake graphite prices
had followed since they were first set up. It was intended to
track the price movements that were taking place across a large
number of sub-markets involving graphite.
Fastmarkets’ decision to opt for assessments of
single mesh size and multiple carbon contents will allow our
reporters to keep track of a fast-growing market that is
expanding in many directions simultaneously, while producing
price points that are digestible and representative of key
Evolving markets: moving to single product
The industry and the graphite market as a whole have evolved
With mineral commodity markets gaining increased prominence,
the need for transparent and trackable information is growing.
The requirements of Fastmarkets’ subscribers are
evolving as well, and the feedback gathered over the past year
on graphite pointed in one clear direction: the need to deliver
single product pricing information on flake graphite.
The launch of the new flake graphite price assessments is
intended to meet this demand.
The use of standalone price assessments for single product
grades, rather than one assessment incorporating four different
grades in one range, will allow subscribers to better engage
with the graphite pricing information that Fastmarkets
provides, making it easier for users to track and use this
In order to do so, Fastmarkets will be tracking one base
grade material (where most market liquidity can be found), and
also providing an indicator tool (known as Value In Use, or
VIU) for the assessment of grades other than the base
In future, Fastmarkets’ price assessments for
flake graphite will track material of single carbon content and
single mesh size, taking 94% C as the base grade, while
maintaining three separate assessments for the main mesh size
materials - +80, +100 and -100 mesh.
Introduction of a new indicator tool
The Carbon-VIU is intended to measure, in percentage terms,
the market’s opinion of the price value of a 1%
change in carbon content.
The VIU will be calculated through the analysis of all data
collected by Fastmarkets for material ranging from 94% to 97%
carbon. To achieve this, our reporters will continue to collect
data points across the 94-97% C range.
The VIU shown will be the value implied by the market and
not an in-house assessment. This will allow for a calculated
linear adjustment to be applied to the base specification,
depending on carbon content.
To give an example of what the carbon-VIU means in practical
usage: A published Carbon-VIU of 7% will mean that material
with 95% carbon content is priced by the market, on average, as
being 7% more expensive than 94% carbon content material,
assuming that other factors remain equal.
In the same way, it will mean that 96% carbon content
material is 7% more expensive than 95% material; and that 97%
carbon content material is 7% more expensive than 96% material,
or 21% more expensive than 94% carbon.
The accompanying chart, relevant to May 30 this year, shows
how the VIU calculator can be used by applying a percentage
premium to the 94% C base price as carbon content increases.
Regression analysis will be used to determine the relationship
between our base specification and other graphite products with
varying carbon content.
Please get in touch with the graphite pricing team if
you have any questions about this change, if you would like to
receive our weekly graphite newsletter, or if you would like to
be a data submitter.
Contact Davide Ghilotti by email at:
firstname.lastname@example.org and use the subject heading 'FAO: Davide
Ghilotti, re: graphite.’