Creamer Media Login

Benchmark sees softer outlook for natural graphite as Chinese regulatory overhaul starts

6th January 2017

Creamer Media Deputy Editor: North America

Font size: - +

VANCOUVER (miningweekly.com) – Graphite suppliers are expecting prices to fall by between 10% to 18% as China starts removing a 20% duty on all natural graphite exports from 2017 onwards, London-based Benchmark Mineral Intelligence said Thursday.

When the duty is eventually removed, global prices are expected to experience “serious downward pressure” as China – which already hosts many of the lowest cost producers in the world – will be able to export at prices up to 20% lower than current market rates, Benchmark consultant Andrew Miller said in a company blog.

The duty is expected to only apply to flake graphite concentrate, rather than its value-added derivatives such as expandable and spherical graphite, he points out.

Miller warned prices were headed to “unprecedented lows” in an industry that has experienced almost five consecutive years of downward market pressures. It threatens not only the existence of established producers elsewhere but also several development stage projects, with higher production costs, Miller explains.

China will also by year-end implement an environmental tax on graphite producers to clean up some of the country’s less efficient operations and potentially ramp up consolidation in the industry, Benchmark said.

Miller expects many established and development-stage projects to think about value-added production, which pricing structures are expected mostly unaffected. “The news will have little impact on their business models. But for the few outside of China which try and compete in the flake concentrate market, troubling times could be ahead,” he cautioned.

While it is too early to judge the true impact of this type of announcement for the wider industry, it does signify a major shift in China’s approach to the graphite market, Miller said.

Edited by Creamer Media Reporter

Comments

The functionality you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

Click Here

MAGAZINE & ONLINE

➕

RESEARCH CHANNEL AFRICA

➕

CORPORATE PACKAGES

CLICK FOR A QUOTATION

➕