How is graphite priced?
Like uranium, there is a posted price for graphite which provides a guideline with respect to longer term trends but transactions are largely based on direct negotiations between the buyer and seller. Graphite prices are also a function of flake size and purity with large flake (+80 mesh), 94% carbon varieties commanding premium pricing. Prices exceeded US$1,300/t in the late 80s but crashed to US$600-750t in the 90s as Chinese producers dumped product on the market. During this period there was essentially no exploration and as a result there are very few projects in the development pipeline.
Graphite prices did not start to recover until 2005 and easily surpassed previous prices with premium product selling at close to $3,000/t as the supply of large flake, high carbon graphite was tight early in 2012. Price appreciation was largely a function of the commodity super cycle and the industrialization of emerging economies as new, high growth applications such as Li ion batteries have not yet had a substatial impact on demand and consumption. Graphite prices have since come down by about a third due to slower growth in China and economic weakness in the US and Europe. No new graphite mines were built during the last cycle and the supply problem should become more acute as economies recover.
Price range for +80 mesh, 94-97%C graphite (US$/t)