Northern Graphite Provides Update on Graphite Prices
September 05 2017 - 9:53AM
Northern Graphite Corporation (“Northern” or the “Company”)
(NGC:TSXV) (OTCQX:NGPHF) reports that the price of large flake (+80
mesh) graphite has increased by approximately 30 per cent over the
last couple months and is again selling for over US$1,000/tonne,
FOB China. European and North American prices are generally
US$50-100/tonne higher. XL flake (+50 mesh) prices have also
risen significantly while smaller flake sizes have experienced more
moderate price increases. It has been reported by Industrial
Mineral Magazine that the supply of large and XL flake graphite is
tight and some speculative investment is taking place.
Gregory Bowes, Chief Executive Officer,
commented that; “While it is still early, this is hopefully the
start of the same upward price trend experienced by the other
lithium ion battery (“LiB”) minerals, lithium and cobalt.
Northern is very well positioned to benefit with an advanced stage
XL flake deposit and a proprietary purification technology that
offers an alternative to the Chinese process which is creating
environmental issues.“
Industrial Minerals Magazine, Benchmark Mineral
Intelligence and Roskill Information Services have all commented on
the situation and should be referred to for additional
information. Reasons cited by these and other sources for
rising graphite prices include:
- Production and supply problems in China due to stricter
enforcement of environmental and safety standards and restrictions
on the use of dynamite in some areas. High purity and large flake
sizes have been particularly affected. Also, production costs
have continued to increase due to environmental regulations, higher
taxes and land fees, labour and power cost inflation and shortages
of ore supply. China is introducing a new environmental tax
in January, 2018 which is expected to have a significant effect on
the graphite industry and has announced its intention to build a
graphite stockpile equal to 80 per cent of annual production by
2020.
- The steel industry is recovering. Global output was up
4.5 per cent in the first half of 2017 and a number of companies
have reported improved financial results. Refractories remain
the largest market for flake graphite and mainly require large
flake sizes.
- Continued strong growth in lithium ion battery demand.
Small flake graphite is used to make LiB anode material because it
has been plentiful and low cost. If LiB demand growth meets
expectations, anode material suppliers will likely have to start
using larger flake sizes and to compete with traditional markets
for supply creating further pressure on prices. Raw material
prices for synthetic graphite LiB anode material are also reported
to be “surging.”
- XL flake production is declining as resources in Shandong
Province, a major source, are being depleted and it has also been
heavily affected by environmental closures.
Heilongjiang Province, the largest producing region, has mainly
smaller flake. The expandable graphite market, which is
largely based on XL flake, is one of the fastest growing along with
LiBs and this is putting additional pressure on prices. Expandable
graphite is used for thermal management in consumer electronics, as
a gasket material in the automotive, petroleum, chemical and
nuclear industries, to make conductive plates for fuel cells and
flow batteries, and as a fire retardant.
About Northern GraphiteNorthern is a Canadian
company that has a 100% interest in the Bissett Creek graphite
deposit located in southern Canada, relatively close to all
required infrastructure. Bissett Creek is an advanced stage
project that has a Full Feasibility Study and its major
environmental permit. Subject to the completion of
operational and species at risk permitting, which are well
advanced, Northern could commence construction early in 2018
pending financing. The Company believes Bissett Creek has the
highest margin, best flake size distribution and lowest marketing
risk of any new graphite project, and has the added advantages of
low capital costs and realistic production levels relative to the
size of the market.
Gregory Bowes, B.Sc. MBA, P. Geo., a Qualified
Person as defined under NI 43-101, has reviewed and is responsible
for the technical information in this press release.
This press release contains forward-looking
statements, which can be identified by the use of statements that
include words such as "could", "potential", "believe", "expect",
"anticipate", "intend", "plan", "likely", "will" or other similar
words or phrases. These statements are only current predictions and
are subject to known and unknown risks, uncertainties and other
factors that may cause our or our industry's actual results, levels
of activity, performance or achievements to be materially different
from those anticipated by the forward-looking statements. The
Company does not intend, and does not assume any obligation, to
update forward-looking statements, whether as a result of new
information, future events or otherwise, unless otherwise required
by applicable securities laws. Readers should not place undue
reliance on forward-looking statements.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For additional information, please contact: Gregory Bowes, CEO (613) 241-9959
Northern Graphite (TSXV:NGC)
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