Roskill reports that prices for Chinese graphite continue to rise as producers contend with increasing electricity costs and supply disruption caused by limits on energy consumption.
For raw material flake from China, this was the fifth month of price rises for many grades, with FastMarkets IM reporting 94% C grades to have increased by 12% and 11% between May and October for fine and large flake sizes respectively. Meanwhile, prices for 94% C medium flake remained flat until July but have since risen by 15%.
Roskill noted that battery grades are particularly affected as both the manufacture of synthetic graphite and the processing of spherical graphite from natural flake are known for their high levels of energy consumption.
Demand is growing rapidly for both natural and synthetic graphite in batteries as the EV sector recovers quickly from the pandemic, compounding issues of reduced supply. Prices could rise higher in Q4 if producers aren’t able to build up stocks now, ahead of typical winter closures.
Chinese graphite prices are now the highest they’ve been for many years. Graphite shipments also continue to be impacted by limited access to containers and vessels, although the situation is much improved compared to the early months of the year, Roskill said.
This week, Syrah Resources reported that its Q3 production had been constrained by disruption in the global container shipping market. The company reported its production in Mozambique as 25kt in Q3, down from 29kt in Q2. Prior to COVID-19, the company was the largest producer ex-China, and it is looking to regain market share following reopening of the Balama mine in Q1. Total output for 2021 is likely to rival the next-largest ex-China producer, National de Grafite in Brazil. Syrah Resources is expected to continue increasing output into Q4, having reported 50kt of natural graphite sales orders in Q3.