Walkabout Resources has questioned the accuracy of reports that spot prices for all graphite flake sizes in China have experienced a “sudden and material decrease”.
China is the world’s largest consumer and producer of natural graphite.
The reports have cited the sharp depreciation of the Yuan, additional production from Madagascar and a seasonal increase in domestic Chinese production as the cause for increased market supply and decreased graphite prices.
Walkabout concluded that demand for larger flake sizes remained robust, while the domestic market in China is sensitive to over-supply of finer graphite suited to lithium ion battery manufacture.
The prices for large flake products have increased despite the negative effects of currency depreciation.
Walkabout is developing the Lindi Jumbo graphite project in south-east Tanzania. The project will produce high-grade large and jumbo flake graphite products, in line with rising prices.
Western Australia-based Walkabout is also exploring in southern Namibia at the Eureka lithium project and have acquired a gold and base metals exploration portfolio in Northern Ireland and Scotland.
Another Australian minerals company, Syrrah Resources, has recently reduced graphite production from the Balama mine in Mozambique during the fourth quarter to 5000 tonnes a month, down from 15,000 tonnes.