![]() “But supply chain localisation makes our expectation of growing deficits by 2030 in both synthetic and natural graphite feasible.” “The extent of substitution with synthetic graphite, where China is dominant, remains the key debate and makes a scarcity pricing moment (like lithium in 2021/22) unlikely,” Mr Shaw observed. China supplies about 85 per cent of the world’s battery-grade graphite. The US and its allies are seeking to break from China’s dominance over critical minerals, which are crucial for electronics and defence applications including weapons systems. Graphite is one of 50 minerals listed by the United States as being critical to national security and economic growth. In a quickly growing market this isn’t a zero-sum game,” Mr Shaw said. “In natural graphite we marginally prefer ASX-listed Talga over Syrah. UBS anticipates Syrah, which owns the Balama mine in Mozambique, is well-placed, alongside Talga Resources, a pre-revenue explorer hoping to build a graphite mine and battery processing facility in Sweden. “We think that the market is more focused on spot graphite prices which are down 30 per cent from 2022 highs versus the potential upside ahead from continued EV momentum and potentially increasing natural graphite share,” he wrote in a note to his clients. That’s a 50 per cent recovery from the $US570 per tonne spot price on Friday. Lachlan Shaw, the lead author of the research, forecasts natural graphite prices will fetch $US850 per tonne by the end of the decade, due to a six-fold increase in demand to 6.3 million tonnes by 2030. Syrah is the largest vertically integrated graphite producer outside China. This type of battery is not as robust – it requires more frequent charging – but UBS expects automakers will look past this to embrace its cheaper cost and lower carbon profile. LFP batteries, which requires large amounts of graphite, are a form of lithium-ion battery. Shaun Verner is the chief executive of Syrah Resources. Stock in Syrah surged nearly 15 per cent following the publication of the investment bank’s analysis on Friday, which estimates electric vehicle automakers will adopt cheaper lithium iron phosphate batteries. Syrah Resources, the ASX-listed graphite producer, is set for a moment in the sun with demand for the key battery material expected to send spot prices up by more than 50 per cent, according to brokers at UBS.
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