Welcome to Refwin.com, Join Free  |  Sign In Home  Inquiry   Contact   Mobile   Free E-Weekly News   中文站
Directory Price Market Buy News Conference Dictionary
I want to search:          
Home >>News 
Syrah’s flake graphite output to reflect ‘balance’ in the market
2019-11-12

Nov. 12, 2019 - Syrah Resources has adopted a new, flexible approach to the flake graphite market following a dramatic year in which it began commercial production from its Balama facility in Mozambique and produced 137,000 tonnes in the first nine months.


The Australian miner then slashed its target production for the fourth quarter of 2019 to 5,000 tonnes per month.

"Looking at 2020, we plan to be flexible and respond to the market," Joe Williams, marketing manager at Syrah Resources, said on Tuesday November 5. "We are looking for inventories to reduce and the market to come back into balance. We will match production once the market is back in balance."

Over 2019, the combination of softening demand and the arrival of new material on the market has weakened the prices for flake graphite.

"In the short term, in combination with other mine developments, Balama is larger and more productive than the market can currently absorb sustainably," Williams said. "Additional supply has created an imbalance and this is why we remain dynamic to the conditions in the market."

In response to the sharp fall in the price, Syrah plans a new approach to the market. Production will be in proportion to demand and will be ramped up once prices have recovered – and it can be ramped up quickly in response to changes in the market.

"It does not currently make sense to front-run demand at unsustainable levels," Williams said. "This is a market in transition to global integration and we continue to test the price against plant output and market balance. Ultimately, this leads to a point where price is higher than production cost for enough of the cost-curve to be incentivized to produce."

Williams conceded that the company had overestimated how much the industry would increase in size in 2019. "The market has not grown as much as we would have liked but the long-term fundamentals of the market are in place and very strong," he said.

The company retains its full commitment to the Balama project, however. "There is no better graphite asset or plant out there," Williams said.

Despite the decision to scale back production, Syrah remains committed to the business need to produce on a large scale to bring down unit costs.

"On a long-term basis, supplying to the lithium-ion industry, small production volumes don’t make sense," Williams said. "However, in the short term, we are making an investment to balance the market."

Related Reading
Rio Tinto expects coronavirus impact on Q1 demand, supply chains   2020-02-27
Seven Refractories expands main laboratory in Divača/Slovenia   2020-02-26
Michael Van Hill joins HWI as Vice President, Supply Chain   2020-02-25
Tata Steel Puts Break on Indian Steel Plant Expansion   2020-02-22
Rio Tinto board changes   2020-02-21
Rio Tinto to establish Oyu Tolgoi coal power plant   2020-02-19

X
Online Service