Graphite supply chain issues: Evolution Energy and Sarytogan

The US interest rates lifted by only 0.25% last week, consistent with the expectations that have been muted by the four US bank failures. The bank failure reverberations continued to overhang the US markets and Europe continued to be subdued even though UBS stepped in to bail out Credit Suisse. They similarly had a depressing effect on our local markets, but the gold price movements generated more focus on the gold mining sector. Generally, markets continue to be challenging.

Benchmark Mineral Intelligence has been harping on about graphite for sometime, preaching that there is a world shortage of graphite if the projected push to EVs maintains expected momentums. It is looking for a near term price squeeze because it is difficult to see any new mines coming on stream until 2025.

We have already seen the price of graphite fines increase by about 25% over the past 12 months, even while production has lifted by 25%. Beyond this point we are likely to find that currently supply is relatively inelastic to price movements so there could be some short-term fun and games in the graphite market.
 

 WeeklyComm25March2023.pdf