Charlotte McLeod reports that Andrew Miller of Benchmark Mineral Intelligence weighed in on the factors that influence graphite prices and on the status of Chinese graphite production. The resource industry as a whole is down, but graphite is one commodity that continues to attract investor interest. Unfortunately, the graphite industry can prove difficult to navigate - pricing is not straightforward, and the terminology companies use is often not familiar to those accustomed to the terminology of the better-known precious and base metals sectors.
With those issues in mind, the Investing News Network contacted Andrew Miller, a consultant at Simon Moores-led BMI. He was able to shed some light on how grade, purity and flake size influence graphite prices, as well as the Chinese operations. To begin, Miller explained that purity and flake size, also known as mesh size, really influence prices in terms of flake graphite. Those are the two things that you will see mentioned mostly when discussing graphite pricing. They are also what market participants look at when grading graphite deposits.
However, while both of those factors are important when determining graphite prices and grades, not every industry places the same value on each one. Quite often because of the niche requirements of each industry. They have very specific criteria. For some industries, purity is more important, and for other industries flake size is more important, Miller advised.
For example, for the spherical graphite industry, purity and the shape of the particles are both key factors. That is because spherical graphite is used by the battery industry, and must be increased to 99 percent purity. Meanwhile, for the refractory industry, flake size is the overriding price criterion.
Battery demand should also help effect a graphite market turnaround. We will start to see the effects of that demand at the end of 2015 or early in 2016, Miller said.
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