Fastmarkets’ latest monthly price assessment
for graphite, amorphous, 80% C, -200 mesh, fob China, was
$380-430 per tonne on August 19, widening downward by $10 per
tonne from the previous assessment in mid-July.
Liquidity was reported at the high end of the range while
there was an offer out on the low end, indicating mixed market
sentiment. There was a weakening domestic market and stronger
international markets, but the latter were subject to
disruptions arising from the soaring freight costs outside
China to main destinations such as Europe and the United
States, as well as pre-existing availability issues.
"Demand is declining with [electric] power restrictions
imposed on steel mills in most regions of China," one trader of
amorphous graphite in the country said. "Meanwhile, the soaring
freight costs in the seaborne market have added more pressure
on the current market performance."
Multiple regions in China have been subject to power usage
curbs since May due to the unusual limitations on the
electricity system this year. Power restrictions resulted in
output in Guizhou province being reduced by about 3,300 tonnes
per day in July, Fastmarkets heard, with operations being
suspended for three to five hours each day as a result of
The power restrictions did not only result in declining
steel output at blast furnaces (BFs), but also at electric-arc
furnaces (EAFs). Given that amorphous graphite is mostly used
as a carbon raiser to strengthen steel in EAF processes, but
also in the linings of BFs for iron production because of its
high thermal conductivity, the output reduction at steel mills
was bound to affect their demand for the material, according to
a producer of amorphous graphite in China.
Meanwhile, immediate demand for amorphous graphite has also
been slashed due to there being ample inventory among
"Steel mills built enough inventory of the material in the
first half of this year amid the availability issue affecting
amorphous graphite. As a matter of fact, the [volume of]
material they sourced [at the time] increased by 3.33%,"a
second producer source told Fastmarkets.
Nevertheless, demand was reported to be stronger in
destinations outside China. Suppliers serving Europe reported
growing demand for amorphous graphite material from several
origins, including China and Turkey, with consumers
replenishing low stock levels and reporting full order
This suggested the possible development of a two-tier
market, and could account for liquidity being reported at the
top end of the current price range or even higher, sources
On the supply side, the availability of amorphous
graphite has been a problem since the start of the year, with
mining operations interrupted for safety checks and
environmental inspections in China. The price of amorphous
graphite surged by 37.82% at the mid-point on an fob China
basis from the start of the year, when it was $270-325 per
tonne, to a year-to-date peak of $390-430 per tonne in the
middle of July.
"Inventory is piling up gradually at the moment, due to
slowing demand from buyers in China and abroad, when you factor
in the global logistics issue," a second trader said.
Freight costs have rocketed since the fourth quarter of last
year, and the latest bulk shipment of amorphous graphite on
August 19 was said to have cost around 100 yuan ($15) per
tonne, while the cost for a full container load (fcl) would
have been around $250-300 per tonne from China to Europe,
according to sources in Europe.
The current fcl cost, sources said, compared with $45-50 per
tonne outside China to Europe under normal circumstances.
Mixed sentiment for small flake graphite
Prices for fine flake graphite were stable in the Chinese
market during the week to August 12 on low liquidity. But mixed
sentiment characterized the fob China market, with global
logistics problems and weaker domestic demand for refractories,
but a sound spherical graphite sector.
Fastmarkets’ weekly price assessment for
graphite flake 94% C, -100 mesh, fob China (-194), was $540 per
tonne on August 12, in line with the previous assessment.
Despite this stability, inputs received indicated that
market participants disagreed about the near-term outlook when
the overseas market comes back from the summer vacation period.
This could depend on the global logistics situation, which was
adding uncertainty to import shipments, as well as the supply
situation in China, making it difficult to say how the market
will perform in the near term, according to one graphite trader
The continuing international logistics disruptions have
hampered China’s imports of flake graphite. Syrah
Resources, one major source of flake graphite outside China,
reported that it could not match production and sales from
Balama in Mozambique with customer demand, owing to the present
challenges of global shipping.
"We have a shipment ordered with Syrah, but it seems that it
will not arrive until the end of August, a delay of two
months," a spherical graphite producer in China said.
According to Chinese customs data, the
country’s imports from Mozambique were around
1,309 tonnes in the first half of 2021. Syrah Resources
suspended operations at Balama in 2020 because of the Covid-19
pandemic, but restarted production in March 2021.
Adding to the price support that has come from lower import
volumes was the low inventory of small flake graphite in China.
Some market participants reported a tight balance in the small
flake graphite market due to sound demand from the spherical
In addition, international buyers will be back from their
summer vacations soon, and downstream users in China will start
to restock in September before the winter stoppage season in
Heilongjiang province. That will boost market sentiment for a
while, according to one supplier outside China.
Despite these positive trends, some market sources tended to
think that a weak refractories sector in China and a stable
spherical graphite sector might offset any support brought by
the supply side.
"Prices of small flake graphite tend to be stable for
long-term clients in the spherical [market]," a second
spherical graphite producer in China said. "Suppliers might
want to push up prices because of increasing costs, while they
have to factor-in downstream buyers’ willingness
to accept prices."
Given that refractories remain a major downstream
application for flake graphite, a weaker steelmaking sector
could weigh on the market, according to a producer in
"The expected cut in steel production over the second half
of the year might weigh on demand for flake graphite," the
producer said. "Despite low inventory among downstream
refractories producers, it might be difficult to increase the
price of flake."