GREY:GLKIF - Post by User
Comment by
BShunteron Dec 15, 2016 6:13pm
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Post# 25607214
RE:RE:there are 2 types of synthetic graphite
RE:RE:there are 2 types of synthetic graphitesorry hit post too soon...
The current proven technology for the purifying, milling, shaping, and coating of the natural flake graphite to compete with the synthetic graphite for Li-ion EV market has a 25% recovery, so 4 tons of purified flake graphite to make 1 ton milled, shaped, and coated graphite (or spherical graphite) for this market. So many flake companies will say that the sphercial graphite has a really high selling price and really high margin. That statement is partially correct; high selling price is not necessarily high margin as you are only selling 25% of the graphite at the high price. My opinion of a successful graphite producer is one that will sell the entire "cow"; hooves and all. Selling the remaining 75% produced from the milling/shaping process may be more important for profitability and cash flow than the selling of the spherical graphite.
For example, lets say that 1 ton of the Li-ion battery grade spherical graphite (milled/shaped/coated) sell for $7,500 a ton. Nice! right?
But the other 3 tons from the milling/shaping/coating sold in a nice little niche markets at an average of ~$3,000 per ton or a total of $9,000 for 3 tons, which product is more profitable for the company? Well, its hard to tell because it depends on you handle and distribute operating costs. But the lower selling price could very well be more profitable. Its prime rib vs hamburgers. Everyone love prime rib, but many of us are fine with a good burger. Even at a selling price of $2,000 per ton for the milling/shaping "waste" graphite, the markets are probably easier to quality your products and there are your first sales. Sounds a little like GLK's plan.
The graphite space is a tricky one! Research and understanding the big picture, all markets, and all uses is key for me. Very happy to see logic and research on this Stockhouse board. It is the reason why I only comment here, and have only began to comment recently.
Good luck all!