graphite leads the market

Graphite is proving to be a hot commodity at the moment as demand for iPads, iPhones and smartphones increases.

In the current market, graphite prices have been increasing solidly and demand is outstripping supply.

Prices of coarse flake graphite have risen from around US$600 per tonne to around US$3,000 per tonne.

Based on demand and supply fundamentals it is unlikely that graphite will return to its past lows and the price of graphite has the potential to rise even further.

Demand is being driven by the need for products such as batteries and fuel cells, as well as a new technology called graphene – a one atom thick sheet of carbon that has a number of potential uses in electronics.

Automotive and iron and steel industries are the key end-users of the material.

China produces about 70% of the world’s graphite but is experiencing slowing growth and reserve depletion.

The nation is also continuing to consolidate and reduce the number of graphite mines in Hunan province from 230 to 20 mines which will constrain global supply further with a loss of around 100,000 tonnes per annum, or 10% of annual global graphite supply, forecast.

Most western governments classify graphite as a “critical mineral” and depend on supplies from China, Brazil, and India, which produce nearly all of the world’s graphite.

Graphite has recently had quite substantial return to interest from the investment community due to its near-term prospects and long-term growth potential.

Article by Angela Kean

TTR.