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GRAPHITE ADVOCATE NEWS

Issue No. 27 Detailed Outlook June 2007

This outlook is based on structured, in-depth conversations with well-placed industry observers, some preliminary statistics, a few corporate press releases and associated trade press items, and the professional judgment of the Editor/Publisher, Harold A. Taylor.

New readers of GAN should also check the cover for “Early-Bird”, “Pulsetaking” and “Late-Bird” Outlooks, and the large body of information built up in the back issues, Issues 1 to 26.

General 2007 Outlook:  The general world outlook for natural graphite looks mildly encouraging for 2007, after a generally satisfactory 2006.  This is probably the result of a longer-term shift by the Chinese away from exporting graphite because of balance-of-payments considerations and increased needs for graphite domestically, particularly by the Chinese steel industry.  Overall U.S. natural graphite sales in 2006 were down a few percent from 2005.  Natural graphite sales in 2007 could be up 5% from 2006.

Outlook for graphite-based refractories: Natural graphite (mostly flake) is used in alumina-graphite shapes, carbon-magnesite brick, plus some in crucibles, monolithics (i.e. gunning and ramming mixes), and others; this is the largest end-use.  The alumina-graphite shapes are used as continuous casting ware and the carbon-magnesite bricks are used to line steel converters and electric-arc furnaces to withstand extreme conditions.  Sometimes high-purity monolithics are now used, forming a continuous furnace lining, rather than carbon-magnesite brick.  U.S. graphite demand (sales) in 2006 for use in refractories in this end-use was up about 5% from 2005; 2007 demand is likely to be up another 5% from 2006.

Outlook for graphite (natural flake) in expanded graphite, graphite foil, and packings; this is probably the next-largest end-use.  Expanded graphite is used to make graphite foil, which is used in turn in heat sinks and other items; the expanded graphite is also used as packings or as various other items.  Demand in 2006 in this complex end-use was down 10% from 2005.  The 2007 demand in this end-use is likely to be flat from 2006.

Outlook for (natural) graphite in brake linings: Natural graphite (amorphous, fine flake) is used in brake linings for nonautomotive vehicles.  The 2006 U.S. graphite demand in this use was down 3% from 2005, and 2007 demand will be down 5% from 2006.

Outlook for some of the smaller end-uses:  This would include natural graphite use in powdered metals, in plastics and rubber, in lubricants, and in foundry facings.  The 2006 demand for natural graphite in almost all of these end-uses remained flat with 2005, and will probably be in the same range in 2007.
Outlook for "high-growth large-volume" end-uses:  Still nothing likely for quite some time.  One manufacturer stopped making graphite plates for fuel cells, pulling out of that market.

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