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GRAPHITE ADVOCATE NEWS
Issue No. 3 March - April 2001
Outlook for graphite, 2001: Since most graphite goes into steel-related uses, and the world steel industry did a little better than expected in 2000 and might continue to do so in much of 2001, the traditional uses of graphite may show slow growth. Two new and potentially significant end uses have emerged, in fuel cells and in Li-on batteries, that could start taking significant amounts of graphite in the next few years. For graphite supply and price level, the critical factor continues to be China. At this time, the U.S. economy still appears to be weakening. The next issue will cover the outlook for 2001 from the viewpoint of actual market participants and observers.
USGS issued its preliminary 2000 statistics; prices are below. Apparent U.S. consumption rose from 26,000 tonnes in 1999 to 28,000 tonnes in 2000, 44% of which was used in refractories. World production rose from 685,000 tonnes in 1999 to 720,000 tonnes in 2000, mostly from an increase in China.
Issue No. 2 mentioned that flake and amorphous graphite prices according to Industrial Minerals, the major source of price information, appear to have been stable from 1998 through yearend 2000. For example, large crystalline flake (90% C) sold/sells at $480-$550 per tonne, and crystalline small flake (80%/95% C) sold/sells at $270-$500 per tonne. This time, we will examine the situation in some detail. The ranges shown reflect that natural graphite is not a very fungible commodity, particularly flake graphite. In addition to a continuous range in %C and flake size (length and width of the hexagonal platelet), the plates can vary in thickness. The nature of the impurities (gangue) can be important; if the impurity is quartz it will make the graphite gritty and not good for use as a lubricant. A calcium carbonate impurity graphite would be preferable. Another complicating factor is that an abundance of 94% C graphite from newer plants has allowed customers to demand it at the same price as lower grades. The newly-released USGS average prices for crystalline flake rose from $514 per tonne in 1998 to $540 per tonne in 1999 and $550 per tonne in 2000, suggesting no price erosion. Taking the average value of certain U.S. flake graphite imports of known and stable carbon content and properties, such as those for Madagascar and Brazil, over the same years, suggest that some price erosion has taken place during 2000. The USGS average prices for Mexican amorphous graphite rose from $192 per tonne in 1998 to $225 per tonne in 1999 to $230 per tonne in 2000. Thus the unchanging posted price ranges seem to conceal a small upward and then downward creep (for flake) in prices, perhaps a true change but perhaps (more likely) a reflection of an upward creep in purity.