Graphite Pricing

Current graphite prices US$/tonne (94-97%C)

XL flake $1,750/t (+50 mesh)
Large flake 1,000/t (+80 mesh)
Medium flake $800/t (+100 to -80 mesh)
Fine flake $650/t (-100 mesh)

Graphite Price Update!!

Graphite prices peaked in 2012 due to the phenomenal growth in China, the resultant commodity super cycle and their effect on steel demand which has been the single biggest user of graphite. Since the slowdown in the Chinese economy in 2012, and the subsequent decline in steel demand and graphite prices, the industry has been waiting for the rapidly growing lithium ion battery (“LiB”) market to offset the steel industry decline and to start driving graphite prices higher. There is evidence that this has started. Over the last four or five weeks there have been three increases in the price of graphite. While they total a modest 10%, this is the first real sign that battery demand is doing for graphite prices what it has already done for lithium and cobalt (which are the other two main minerals used in lithium ion batteries). With steel demand also recovering and production issues in China, the supply/demand picture for graphite is very favourable and the potential for higher prices very real.

Aug Price Chart

How is graphite priced?

Like uranium, there is a posted price for graphite which provides a guideline with respect to longer term trends but transactions are largely based on direct negotiations between the buyer and seller. Graphite prices are also a function of flake size and purity with large (+80 mesh) and particularly XL flake (+50 mesh) and +94% carbon varieties commanding premium pricing. Prices for +80 mesh large flake exceeded US$1,300/t in the late 80s but crashed to US$600-750t in the 90s as Chinese producers dumped product on the market. During this period there was essentially no exploration and no new mine has been built in the west for over 20 years.

Graphite prices did not start to recover until 2005 and well surpassed US$1,300/t with large flake selling for up to $3,000/t in early 2012 with some shortages reported. Price appreciation was largely a function of the commodity super cycle and the industrialization of emerging economies as new, high growth applications such as Li ion batteries (“LiBs”) had not yet had an impact on demand and consumption. Graphite prices subsequently declined to the $750/t area for large flake graphite due to the strength in the US dollar, the slowdown in China and the lack of growth in Japan/Europe/US. As a result, Chinese flake production declined an estimated 25-30% in 2013 due to low prices indicating they are near the marginal cost of production which should limit further price declines.

Lithium ion batteries were a very small part of the market seven or eight years ago but have been growing at over 20% due to the explosion in the use of cell phones, lap tops, cameras, power tools, etc. LiBs now account for 20-30% of the graphite market and are expected to continue growing rapidly due to the increasing sales of electric and hybrid electric vehicles as well as grid storage solutions. These applications use much larger batteries and are much larger markets than the small device market.

There is also evidence that the steel industry is recovering which could create a perfect storm for higher graphite prices.