Spherical graphite price holds at 11-year low and flake fines soften

The price of graphite flake fines in China continued to edge lower amid slow demand and a depreciation of the local currency in the week ended Thursday May 25. Spherical graphite prices in the country, meanwhile, held at the 11-year low reached in the previous session

Fastmarkets’ weekly price assessment for graphite flake 94% C, -100 mesh, fob China was $670-715 per tonne on Thursday, narrowing downward by $5 per tonne from $670-720 per tonne on May 18.

The price assessment for graphite spherical 99.95% C, 15 microns, fob China was $2,000-2,300 per tonne on Thursday, unchanged from May 18 but down by 18.9% from $2,500-2,800 per tonne at the beginning of the year.

Market participants lamented the sluggish demand being experienced throughout the graphite market with extremely slow liquidity, not only in the new energy sector, but also in the traditional refractories sector.

“The market is very quiet now. One client from Japan sent out inquiries the other day, but we haven’t heard any feedback after providing the quotation. Buyers tend to test the market, but the buying appetite is low,” a trader in China said.

Elsewhere, in the anode sector, many spherical graphite producers are experiencing shrinking profit margins with prices of the product continuing to hit record lows.

“It is difficult for spherical graphite producers to make profits these days. Many producers tend to cut production with uncertain restart schedules,” a producer source in China said.

Meanwhile, China’s April exports of spherical graphite dropped by 31.08% on month-on-month basis to 3,763 tonnes from 5,460 tonnes in March, according to the latest customs data.

The continuous depreciation of Chinese yuan has added further pressure to the export price of flake fines, sources said.

The Chinese yuan weakened to 7.07 yuan against $1 on Friday, from 7.019 yuan on May 20, according to the currency converter oanda.com.

But while there are few signs that graphite can shake off this bearish sentiment amid the sluggish demand and high inventories among downstream producers, some believe that flake fines prices might be approaching a floor with supply disruptions and the gradual consumption of stocks from last year.

“The room for further downside in the flake fines price could be limited considering the interrupted raw material production recently. Meanwhile, we are only four months away from the traditional winter halt when people must restock for the production shutdown,” a second producer source in China said.

The flake price might have reached a temporary floor considering reduced supply from both the domestic market and sources outside China, according to a graphite producer outside China.

“Anode producers have high inventories of upstream raw materials from last year which they need to consume gradually. But we expect that inventory could be reduced to a relatively reasonable level by June when downstream producers tend to source materials, albeit only on a need-to basis,” the source added.

China’s April imports of flake graphite plunged by 61.03% to 5,517 tonnes from 14,158 tonnes March, according to Chinese customs data.

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