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GRAPHITE ADVOCATE NEWS

Detailed Outlook Issue No. 30 May 2008

Please also see the new Basics/Mines blog for the most current updates.

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”, “Late-Bird”, and “Pulsetaking” Outlooks, and the large body of information built up in the back issues, Issues 1 to 29.

General 2008 Outlook: The general 2008 world outlook for natural graphite looks likely to be close to level with 2007, after being up 10% (as total U.S. imports were) over 2006. The new 20% Chinese export duty (as of 1/1/08) will be an important factor on world graphite markets, as will the growth of the graphite-using Chinese steel industry. The world crude oil price and resulting transportation costs will also have an impact.

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. U.S. graphite demand (sales) in 2007 for use in refractories in this end-use was up 5% from 2006; 2008 demand is likely to be down 5% from 2007 (assuming a bad year for steel).

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; the expanded graphite is also used as packings or as various other items. Demand in 2007 in this complex end-use was down 5% from 2006. The 2008 demand in this end-use is likely to be up 10% from 2007.

Outlook for (natural) graphite in brake linings: Natural graphite (amorphous, fine flake) is used in brake linings for nonautomotive vehicles. The 2007 U.S. graphite demand in this use was down 5% from 2006, and 2008 demand will be down 10% more from 2007.

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 2007 demand for natural graphite in such end-uses was down by varying amounts from 2006, and 2008 will likely be down 5% or a bit more from 2007.

Outlook for "high-growth large-volume" end-uses: Li-on batteries and solar panels could be sizeable markets, depending on what wins in the strong competition with other materials. Li-on batteries in particular could be used in massive quantities in electric vehicles made by the major automobile manufacturers (Nissan-Renault, Toyota, General Motors); the Nissan joint venture with NEC is planning to make 65,000 vehicles per year by 2011. The critical question is how much graphite (if any) will be required.

Welcome to the the website Graphite Advocate News (GAN). GAN appears on a frequent but irregular basis and has been designed to quickly update busy executives and professionals on synthetic and natural graphite developments, usually with a reference to where the item appeared so that more information can be obtained if needed. The most recent detailed comprehensive reference to the production, sources, markets and end-uses of natural and synthetic graphite is the “Graphite” chapter in the new 7th edition Industrial Minerals and Rocks, and the Mining Journal-Financial Times Executive Commodity Report on Graphite both written by GAN's editor and publisher, Harold A. Taylor, Jr.

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