Graphite supplier Syrah Resources flags the accomplishment of two further sales milestones.
In a media release to Australian Securities Exchange, Syrah Resources announced that the company has inked its first binding term sales agreement for coarse flake to China as well as the first sale of 98% fixed carbon grade product has also been achieved.
Syrah has signed the binding term sale agreement with a manufacturer of expandable graphite, Qingdao Freyr Graphite Co. Ltd, based in Shandong China. Under the terms of agreement, Syrah Resources will sell 6kt of coarse flake natural graphite from Balama to Qingdao Freyr over the period of 12 months.
Managing Director and CEO Shaun Verner stated that Syrah’s product mix includes a substantial volume of coarse flake natural graphite. He added that this contract with Qingdao Freyr represents more than 10% of planned +50 and +80 mesh flake production over the coming year and continues to establish Syrah as a major supplier of natural graphite into China.
Meanwhile the company has achieved the second milestone with the production of 98% fixed carbon grade graphite across all sizes in the flake circuit using standard flotation processes. Subsequent to which, Syrah Resources has secured the first spot sale of 98%FC to Japanese customer.
The company informed that the 98% FC flake produced by other major suppliers needs to undergo chemical purification process which significantly increases the production costs. But due to Syrah’s ability to produce 98% FC through its installed layout without chemical purification, the company enjoys greater commercial opportunity to meet the ongoing customers demand.
Edge over higher selling prices would be another leading opportunity for the company as it expects to gain a price premium reflecting cost differential and value in use. As per the release the advantages of value in use includes reduced acid usage, efficiencies in energy usage and lower environmental footprint.
Mr. Verner stated that Syrah expects growth in pricing premiums to arise through value in use differentials for carbon grade and flake size. He added these developments further cement Syrah’s position as the key global supplier of high quality and purity flake graphite for both the battery and expandable graphite markets within the initial year of operation.
Further, Syrah Resources is leveraging the Balama asset to develop integrated battery and industrial material options – BAM and Vanadium. While announcing an update on market progress, Syrah Resources told that it has become a major exporter of graphite to China with key supply to battery and steel markets. Demand for natural graphite is in growth phase to support the manufacturing of lithium ion batteries and this increasing demand particularly in China is expected to drive greater contract volumes to Syrah.
With this update, there has been slight upside movement in the stock price of Syrah Resources Limited (ASX: SYR). Before concluding the trading session at $1.945, SYR has edged up by 0.258% or 0.005 on 12 November 2018. However, the stock has witnessed a negative performance change of 47.43% over the past one year.
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