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GRAPHITE ADVOCATE NEWS

Outlook Reexamined 2008 No. 31 March – June 2009

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, associated trade press items, and the professional judgment of the Editor/Publisher.

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 30.

General Outlook for 2008:  The general U.S. 2008 outlook for natural graphite was clearly negative.  The factor underlying the outlook are the world economic crash beginning October 2008, and the weakness showing up before that date.  Overall U.S. natural graphite demand in 2008 was down 10% from 2007.  The 2008 U.S. import quantity would have supported a fairly unchanged outlook.

Some recent U.S. natural graphite statistics in tonnes
2004
2005
2006
2007
2008p
Imports
63,700
64,500
52,600
58,600
58,300
Exports
46,100
22,100
22,200
15,700
NA
Consumption
39,600
43,200
40,700
39,200
NA

Before going into the individual outlooks for end-uses, the most likely disturber of these outlooks will be mentioned, the crisis in the world economy.  The collapse has added a great deal of chaos to everything, including confidence in the financial system and consumer confidence.  Not only has the crude oil price dropped to under half what it was in mid2008 and may continue to drop, but the prices of many metals and minerals have also dropped severely or crashed.

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.  The alumina-graphite shapes are used as continuous casting ware in the form of nozzles and such to guide the molten steel from ladle to mould.  U.S. carbon-magnesite brick demand is met by imports from China, a shrunken U.S. production, and monolithics used as a continuous furnace lining.  Based on the USGS 2006-07 consumption numbers, the 2007 use in graphite-based refractories was probably down 7% from 2006.  U.S. graphite demand in 2008 for use in refractories in this end-use was likely down 5% from that of 2007, and 2009 is likely to be as bad or worse.

Outlook for graphite foil, expanded graphite, and some related items: This is one of the next-biggest markets for natural graphite, and currently is about 6,700 tonnes annually.  U.S. graphite demand in 2008 for graphite foil and related items was probably down 15%-20% from 2007.

Outlook for (natural) graphite in brake linings: Natural graphite (amorphous and fine flake) is used in brake linings for heavier (nonautomotive) vehicles, substituting for the formerly used asbestos, and now competing in turn with newer organic compositions.  Based on the USGS 2006-07 consumption numbers, the 2007 use in brake linings was down 20% from 2006.  The 2008 U.S. natural graphite demand in this use was probably down 15% from 2007, with 2009 probably worse.

Outlook for some of the other natural graphite end-uses:  This would include natural graphite use in steelmaking, foundry facings, powdered metals, in plastics and rubber, and in lubricants.  Again, for these end-uses, natural graphite will have a complex very price-dependent competition with synthetic graphite and other carbons, especially for use in steelmaking as a carbon raiser.  The graphite demands of this group of end uses in 2008 were likely down 10% compared to 2007, except for big drops in the automotive-related uses (i.e. powdered metals down 25% is the most extreme).

There is more background information on natural graphite end-uses and applications in the "Graphite" wiki on Wikipedia, plus information on synthetic graphite applications (i.e., graphite electrodes), and recycling graphite.

The July 2008 Industrial Minerals has a in-depth and authoritative article on graphite in Li-on batteries, particularly for battery-powered vehicles.  A May 2008 article in the same journal covered the recent developments in fuel cells, including the graphite-using PEM (proton exchange membrane) fuel cells.  However, the later crash in crude oil prices to less than half what they were may drastically slow the development of mass markets for the batteries and fuel cells.

There was a flurry of interest in reopening some of the graphite mines that were closed five or more years ago, and even opening a new one-before November 2008.  Such operations include the Ancuabe operation in Mozambique and the Uley operation in Australia, plus the new proposed Eagle Graphite mine/operation in British Columbia, Canada.  In light of the situation with Chinese graphite mentioned here earlier, plus higher and more attractive graphite prices, this makes sense.  However, this all occurred before the economic crisis and the crash in crude oil prices and many other mineral commodity prices.

Statistical Parameters: The largest-volume Industrial Minerals posted graphite [www.mineralnet.co.uk/] prices are as follows: the December 2007 price for Crystalline Large  90% C +80 mesh was $570-$655 per tonne, in October 2008 $760-$910, and in January 2009 it became $700-$800, and the December 2007 price for Crystalline Fine 94-97%C -100 mesh was $650-800 per tonne, which became $850-1000 per tonne in April 2008, $1050-1090 in October 2008, and $600-$700 in January 2009 .  Calculations based on monthly value per tonne of U.S. imports of crystalline flake show a clear upward trend during 2008.

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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