Graphite Plays

Thanks to springhill:

Soveriegn Metals (SVM)

https://www.aussiestockforums.com/forums/showthread.php?t=5675&p=724379&viewfull=1#post724379

If you are looking for a spec buy in the Graphite group TON is th one.

TON are due to finalize DD on 5 areas in North/East Mozambique, one area adjoins SYR, 3 of the other 4 areas surround and adjoin the old Ancuabe Graphite mine currently being refurbished by Graphit Kropfmühl AG.

Seems that the DD finalisation is only waiting on the interpretation of the Aero mag and Radiometric data that TON recently aquired that covers these licence areas.

Look for a big announcement early next week.

2 years since this thread started, the great Graphite Maniac is still being played out. Many of the codes mentioned in the thread has gone on big runs, especially in the last 3-4 months.

I find myself nodding when I read this part of article in The Australian about the SYR rumour.

Here’s something else that does not add up. While Glencore is big into vanadium, it has no experience with graphite. Is it going to start up a graphite division? That would be a huge commitment given that the graphite exploration space looks increasingly like the uranium bubble in 2007 when more than 250 ASX-listed companies claimed to be looking for yellowcake.

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http://www.theaustralian.com.au/bus...ur-doesnt-add-up/story-fnciihm9-1226987437411

May be the recent $1-2b Glencore takeover rumour of Syrah is the bell for the top, or may be it has many many years to run.

Thanks for bumping this thread, I did not know it existed.

Interesting to read with hindsight what had been said years ago about graphite. As I understand it, graphite is becoming a hot commodity as it is used in phone batteries and electric car batteries - both of which are expected to boom/continue to boom in the foreseeable future. So from that point of view, I cannot see any downside, at least in the medium term.

However, I would like to hear any constructive and contrary views

Note: I hold LMB, and am looking to get into UNX.

Tyler Durden said:

Thanks for bumping this thread, I did not know it existed.

Interesting to read with hindsight what had been said years ago about graphite. As I understand it, graphite is becoming a hot commodity as it is used in phone batteries and electric car batteries - both of which are expected to boom/continue to boom in the foreseeable future. So from that point of view, I cannot see any downside, at least in the medium term.

However, I would like to hear any constructive and contrary views

Note: I hold LMB, and am looking to get into UNX.

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The downside is pretty simple. Graphite is a tiny market. If you add up all the companies claiming to have graphite resources, the market will be flooded and the price of the commodity will inevitably drop.

Everyone said that rare earth demand will grow exponentially and consistently for decades (as they are used in smart phones, electric cars etc etc). But take a look at the rare earth price chart, or the Lynas price chart for the matter. (BTW, some will no doubt argue that rare earth prices are manipulated by the Chinese, so it's not a perfect example...)

Everyone said that uranium will be the energy source for the future... and look at the way Paladin has boomed and busted. (Some will argue that the Fukushima was a black swan that killed uranium, so it's not a perfect example...)

Graphite will most likely be the same. Although there's no way anyone can predict how far the boom would go on for, and when the bust will come. But in 5-10 years time, we will look back at some of these companies and find the exact same chart pattern all over again.

So stay smart, open and nimble and make sure you realise the profit from the boom at some stage.

Uranex (ASX: UNX)

MOU for Off-take with China National Materials:

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01533583

Saw this the day before yesterday, and thought there is still some way to go!!

is this just me or is this graphite fade a complete bubble:
graphite is carbon, not something we are exactly short of; we have already far too much of it in the atmosphere;
You can say diamonds are carbon too yet valuable, except that creating artificial diamonds is not that easy so limited use except for industrial cutting/grinding application;
But graphite is easy to make;
Already synthetic graphites production in the US alone is more than 10% of the world mine graphite.(wikipedia 2010figures so may need refreshing)
If graphite becomes more expensive, factories will just make more.
Money can be made in any bubble but do not expect to be rich in the long term.
my 2c only

qldfrog said:

... Already synthetic graphites production in the US alone is more than 10% of the world mine graphite ...

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Why is it only 10% ?







Disclosure: I hold Archer Resources (ASX: AXE) from time to time.

qldfrog said:

is this just me or is this graphite fade a complete bubble:
graphite is carbon, not something we are exactly short of; we have already far too much of it in the atmosphere;
You can say diamonds are carbon too yet valuable, except that creating artificial diamonds is not that easy so limited use except for industrial cutting/grinding application;
But graphite is easy to make;
Already synthetic graphites production in the US alone is more than 10% of the world mine graphite.(wikipedia 2010figures so may need refreshing)
If graphite becomes more expensive, factories will just make more.
Money can be made in any bubble but do not expect to be rich in the long term.
my 2c only

Click to expand...

Synthetic graphite costs around $20,000 per ton to produce. Natural flake graphite costs around $2000 per ton, which varies a bit due to purity and application but is still significantly cheaper. Synthetic isn't as easy to make as you might think.

This is an interesting article to read, albeit a little old http://www.theaureport.com/pub/na/benoit-gascon-an-insiders-take-on-the-complicated-graphite-market It talks about how the graphite market isn't like a traditional resource because the makeup of the graphite is very important to the buyer, it's not like say gold, copper, iron or whatever where the final products are all the same.

That's why I've invested in the smaller graphite companies. I own KNL, because it already has a binding offtake agreement and is focusing on good quality graphite and buyers for that graphite. I also own VXL because it has historic production and buyers, and will be a first mover. I do own TON as well, as I think it could re-rate in the short-term, but I am very wary of its long term prospects. TON, UNX, SYR and many of the other ones are just focusing on finding the biggest deposits they can and winging it from there, and that strategy could end badly if graphite demand doesn't increase to match.

some interesting article. looks like a bubble to me. total value of chinese exports(worlds largest exporter) only $45m in the past 12 months. this compares with syrahs market cap of over $1bn!

China’s graphite exports continue to rise
Posted on July 7, 2014 by Hongpo Shen

Graphite-GlobalChina is the largest graphite producer and exporter in the world, but Chinese officials have not established a quota system to control graphite mining and exports over the past decades. However, the rapid depletion of resources and the environmental pollution have created problems and Chinese people have started to consider the cost of economic growth against the environmental problems it causes. This concern has also reached the graphite industry and there are calls to issue tighter export regulations for graphite.

“If China’s graphite industry is not reformed, the country will deplete its graphite resources within 20 years” due to rising demand, said Zhang Bin, rotating chairman of the China Graphite Industry Association and president of Inner Mongolia Rising Group, as reported by the state-run China Economic Weekly, quoting an industry expert recently.

Graphite demand has increased in response to rapid development of new applications for this mineral in high-technology fields. Innovative refining techniques have made it possible to achieve very high purity levels needed in applications involving carbon-graphite composites, electronics, foils, friction materials, and special lubricant applications. Moreover, lithium-ion batteries (used in such as hybrid and electric vehicles) according to Bloomberg, use more graphite than lithium. The average hybrid car needs about 22 pounds of graphite while pure EVs like the Tesla Model S require about 110 pounds, causing demand for graphite to surge.

During the first five months for 2014, China continued to be the world’s major exporter of graphite. China exported 11,597 tons of flake graphite in May 2014, representing a 17.99 % year to year increase (it was 9,829 tons in 2013), valued at US$ 10.42 million. In the first five months of this year, meanwhile, the total of export volume of flake graphite in China was 52,137 tons, or a 14.45% year to year increase. Meanwhile the total value of exports of flake graphite increased 11.35% year to year for a value of US$ 44.87 million in the period, according to China’s customs statistics.
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The figures from the Customs also showed that Japan’s imports of flake graphite from China increased 54.57% year over year to 8,942 tons. The USA imported 8,362 tons of flake graphite from China (+35.41% compared with the same period in 2013). Germany imported 5,814 tons of flake graphite (+36.22% year to year). South Korea’s imports from China also rose, reaching 4228 tons (+18%) over the same period in 2013.

Due to the Illegal exploitation, extensive operations and poor management, graphite mining and processing is particularly has caused considerable environmental damage in China. Chinese authorities have already introduced a series of policies to regulate the rare earth industry, such as setting export quotas, adjusting tariff policies, controlling rare earth exploitation. Therefore, some Chinese industry experts have suggested that China should adopt a graphite export quota system similar to what has been adopted for rare earths, urging the government to put more emphasis on the upgrading and transforming the sector. According to Zhou Yu, member of the Chinese Academy of Engineering, China lacks the pricing power in the international market because advanced processing technologies for graphite have been monopolized by few developed countries, accounting for the current difficulties in the sector.

China has estimated graphite deposits for 55 million tons, 77 percent of the world total proven reserves, according to the latest statistics from the U.S. Geological Survey. However, China’s Ministry of Land and Resources (MLR) released its “China Mineral Resources 2013” last year, noting that discovered graphite reserves were 190 million tons.
- See more at: http://investorintel.com/graphite-g...d-rise-first-five-months-2014/#comment-317618

skc said:

The downside is pretty simple. Graphite is a tiny market. If you add up all the companies claiming to have graphite resources, the market will be flooded and the price of the commodity will inevitably drop.

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Right on. Do you know who has been doing all the selling and all the buying in the recent weeks?

rb250660 said:

Right on. Do you know who has been doing all the selling and all the buying in the recent weeks?

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looks like momentum funds and high net worth momentum traders

the graphite market is only 300,000tpa. in my article above, the total export market in china only 50,000 tpa. these tonnages are very tiny. annual exports last 12 months only $50m. the total market cap of all graphite stocks is $2-3bn dollars many multiples of the current global market in revenues.

peaceofmind said:

looks like momentum funds and high net worth momentum traders

the graphite market is only 300,000tpa. in my article above, the total export market in china only 50,000 tpa. these tonnages are very tiny. annual exports last 12 months only $50m. the total market cap of all graphite stocks is $2-3bn dollars many multiples of the current global market in revenues.

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I would agree with the view of who the current traders are in the market. Such a curious commodity and delving into the depths of the market there appears to be much upside potential...I was drawn in by purchase of Lamboo stock and their uptake agreement with China Sciences for 50,000tpa @ $2k/t...and then their SP fall with announcement of (intended) take over of same CS. Interesting to note the export sales of Chinese graphite is around $850/t this year and last year. The article from Hongpo Shen had advised that China does not have high tech refining capabilities...given their capacity to be a quick study I'm pretty sure there will be a turn around to that situation in the near future.

It might be too soon to speak, but if today was anything to go by, the graphite boom seems to have taken a sharp turn.

UNX down 11.36% to 19.5c (from a recent high of 32c).

LMB down 0.64% to 77.5c (after stabilising a bit around 85c)

Tyler Durden said:

... the graphite boom seems to have taken a sharp turn ...

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The AXE has fallen too!

:axt:

Has anyone had a good look at Metals of Africa (MTA), very close to TON and SYR, same geological formations etc, rock chip samples due soon, drilling coming up... Could be good for a punt for the graphite rerate. Market cap of only 20 million (but lots of options on issue), could zoom on good news.

Additionally has a great Zinc Project in Mozambique (Rio Mazoe), could be a company maker in it's own right. Lots of interesting stuff going on, management have elected to take their fees as shares, as opposed to money.

So I have been reading a few articles about the potential use of graphite in 3D printing via the manufacture of graphene. Could be another avenue into a new market.

Ive been looking to get into the 3D printing market, this could provide an alternative way to gain exposure into that market.

AJM article suggests production set to increase to 2.6mtpa by 2020.

SenTineL said:

So I have been reading a few articles about the potential use of graphite in 3D printing via the manufacture of graphene. Could be another avenue into a new market.

Ive been looking to get into the 3D printing market, this could provide an alternative way to gain exposure into that market.

AJM article suggests production set to increase to 2.6mtpa by 2020.

Click to expand...

G'day,SenTineL. I get daily Google alerts to the graphene space (worldwide) and not necessarily on specific stocks, sent out when new news is published. Plenty of reading there. I hold two ASX stock,Talga (TLG) and MRL Corp (MRF). As you are probably aware there are many listed Aussie graphite co's.

I think this is a very exciting area for future development. There are of course the gloomers that compare it to the REE space, that has recently fallen to the wayside, but once the graphite technology is honed the applications to me are endless.

I have found the Google alerts a great way of keeping up with whats going on without having to wade through heaps of sites. Hope you find the info you are looking for.

peaceofmind said:

looks like momentum funds and high net worth momentum traders

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It's mostly professional selling and retail suckers "investing". In and out quick guys.

Graphene Nanochem plc [GRPH] is a technology commercialisation company that operates two commercial platforms, Advanced Chemicals that manufactures renewable chemical products for high growth sectors and Advanced Materials that focuses on the application of graphene nanomaterials for selected high performance industrial use.

http://www.graphenenanochem.com/

[GRPH is listed at the London Stock Exchange, UK]