chinese natural graphite supply applications of amorphous

Chinese Natural Graphite Supply &

Applications of Amorphous Graphite

Kelvin Hu

President, South Graphite Co., Ltd [email protected]

Ⅰ Chinese Natural Graphite Supply Output, prices, market, resources, consolidation, trends of supply, government factor

Ⅱ Application of Amorphous Graphite Current application, new studies, purification, potential applications, outlook for A.G

Ⅰ Chinese Natural Graphite Supply

Questions from Industry Minerals

How was consolidation achieved in the amorphous market?

Can consolidation be achieved in the Chinese flake graphite industry?

What wider implications will this have for the industry as a whole?

How has Chinese governmental policy changed due to environmental concerns?

What does this mean for natural graphite exports?

Chinese Natural Graphite Supply Market

Worldwide Output

Unit : tons

1070000

1160000

1176000 1190000

1210000

1000000

1050000

1100000

1150000

1200000

1250000

2010 2011 2012 2013 2014

2010-2014, the world’s output quantity of natural graphite keeps a stable growth；

The world total output expects to exceed 1.2million tons in 2014；

There are difference gap between official statistical data and actual output in China.

World’s output of natural graphite Data Source : USGS

2010-2014, the world graphite price has been very unstable

Prices


Unit : USD

0

500

1000

1500

2000

2500

2010 2011 2012 2013 2014

Flake

Amorphous

Prices for natural graphite

Data Source : China Non-Metallic Materials Industry Association

Steel Industry consumes nearly 60% the natural graphite(flake & Amorphous) in China；

Annual Output of Carbon-contained refractory material is 2.5 million tons, which consumes

more than 300,000 tons of flake graphite；

High quality anthracite coal(low sulfur) is the main substitution for A.G during the steel

manufacturing.


Prices

( Total : 56%)

Graphite used in steel industry

Refractory 70%

Others 44%

Steel Industry 80%

Amorphous Graphite

Flake Graphite

Recarburizer & HEM as Briquette 60%

Others 40%

Steel Industry 100%

Graphite

( Total : 60%)

( Total : 56%)


Price Analyze

Chinese steel industry is in the position of serious depression, although the output

wasn’t declined, the steel price fallen by 30% compared its level in 2011；

Chinese coal industry is in the same position, the price was falling by 40% compared

its level in 2011.

External factor (F.G & A.G)

Lots of investment have been made into graphite industry, the increasing on production

capacity was far more than the growth of demand；

The data of production and sales can’t fully indicate the balance in supply and demand, a

number of unreleased production capacity is the internal driving force which lead the

downwards on prices.

Internal factor (F.G)

Amorphous Graphite

Chinese Natural Graphite Supply Supply

Resource

South Graphite

Amorphous Graphite in China


Amorphous Graphite

Chenzhou reserves 72.5% of A.G in China, the average fixed carbon is around 80%, the

highest can be 92%, which made it so far the best quality of the world;

The mining belt spreads in town Lutang, which is also the trade name for the products years

back to 1960s, the sloe company was ‘Hunan Lutang Graphite Mine’;

In 1990s, the Company went bankrupt , Large number of private miner went into the

exploitation;

With the ‘Golden Decade of Coal”(2002-2012) in China, the disordered exploitation went

into madness, with the output up to 1.5 million tons of A.G.


Amorphous Graphite

0

200

400

600

800

1000

1200

1400

1600

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Output of A.G in Chenzhou

Unit: thousand tons

Data Source : Chenzhou Statistics


Amorphous Graphite

The madness illegal exploitation disregards the environment, even the safety of labor’s life.

Production safety accident happened a lot since 2002;

In 2007, an extremely cold winter(ice damage) attack Chenzhou, power supply were cut down

for more than one month, the production facility were ruined, the production stopped for

months, the A.G price increased by 60%(from 330.00USD to 530.00USD per ton)


Amorphous Graphite

In 2009, mines closed by local government.

In Nov, 2010, consolidation agreement signed between CNBM and Chenzhou Government.


Amorphous Graphite

25th Mar 2011, foundation of

South Graphite Co., Ltd;

S.G spent 2 billion RMB(320 million USD)

to bought out all the resources from the

original miners.

South Graphite

Government Former owner

Resource

2 Billions RMB Compenstation

Take back license


Amorphous Graphite

In 2012, the consolidation successfully achieved, South Graphite starts to re-plan & re-built

the production system accordingly.

Plans of production for South Graphite

South Graphite designed output capacity of output is 510,000 tons;

Output outside South Graphite is around 80,000 tons in China;

High quality products can only provided by South Graphite;

South Graphite keen to balance the output, prices & market share;

The Trends of supply on A.G will be stable according to the demand;

The demand & Supply expects to increase as the recovery of Steel & Coal industry in China.


Trends of Supply on A.G

Xinghe

Qingdao

Luobei

Jixi


Flake Graphite

Resource

Existing Resource

New Resource

Flake Graphite in China

The FC for graphite from Heilongjiang reaches 12%, which makes it the major supply base .

Xinghe produces large flake graphite.

Newly explored F.G constantly reported in the past two years

The output capacity for F.G is around 1.2 million tons,

The output in 2013 is 540,000 tons, 45% of the capacity.

The output in the first half of 2014 is 180,000 tons.


Flake Graphite

Data Source : China Non-Metallic Materials Industry Association

Output

Effectively consolidation can hardly happen in the near future.

There were some attempt of consolidation on F.G in China, with no effectively result;

Resources are rich and widely exist in China;

Low level of entry to the industry raises the consolidation cost ;

Local government generally put high expectations on graphite, and encourage the invest &

development on its own territory;

No leading company in the industry.


Flake Graphite

Consolidation

F.G will remain excess on supply for a long time;

New supply will continuously appear in China despite of depression;

China will remain as the major supply of F.G in the world, unless richer resources have been

explored outside China;

The demand & Supply expects to increase as the recovery of Steel & Coal industry in China;

The increase of demand on battery will not affect the supply & demand situation;

The global buyers will enjoy low price for F.G for the near years.


Flake Graphite

Trends of Supply


Flake Graphite

Transformation and upgrading is the mainstream and expectation for Chinese industry;

The graphite industry is too much highly anticipated;

There will be more subsidy funds for graphite industry from the government;

Leading company of the industry expects to appear in the next three years;

Environmental policy will knock out few small player, and won’t affect much on the industry;

The custom duty expects to reduce as the recognize back to rational.

Chinese Government Factor

Questions from Industry Minerals

How was consolidation achieved in the amorphous market?

Can consolidation be achieved in the Chinese flake graphite industry?

What wider implications will this have for the industry as a whole?

How has Chinese governmental policy changed due to environmental concerns?

What does this mean for natural graphite exports?

Ⅱ Application of Amorphous Graphite

Application of Amorphous Graphite Status

A.G cannot be upgraded beyond 85% Carbon for high purity uses;

A.G is a form of low evolved graphite;

The structural properties of A.G are not suitable for refractories or batteries;

Research on A.G is far less than its on F.G;

The application of A.G is in low end.

Traditional Views on A.G

Amorphous Flake

A.G is widely used as recarbonizer and HEM in the steel industry, especially in Japan;

Synthetic graphite, anthracite coal, petroleum coke, are the substitutions for A.G;

The demand from steel industry is the key factor of instability for A.G;

Some of the demand from Japan switch to anthracite due to the pressure on cost;


Recarburizer , Heat Enhancement Material

Refining Raw Material EAF

Recarburizer

Converter

Secondary Refining

HEM

Iron Ore

A.G used in steel manufacturing

Annual demand quantity from Carbon rod is 50,000 tons;

85% of the demand stays in China;

Dry Battery is commonly recognized as a sunset-industry;

There is no competitive substitutions.

236

258

224

230

240

200

210

220

230

240

250

260

270

2011 2012 2013 2014 2015

Carbon Rod for Dry Battery


Output of carbon rod for dry battery

Unit: 100 million pcs

South Graphite supplies 40,000 tons of graphite

powder to Foundry & Lubricant in 2014;

Most of the demand are low-grade .

Foundry & Lubricant


South Graphite has been working with Universities, Equipment Manufactures, Potential End

users to develop possible applications for A.G;

Finding the competitive advantage for A.G, either better performance or lower cost, is the

key factor of prospects.

Application of Amorphous Graphite Development

Development on A.G


Development Partners

Purification is the precondition of further application.

Flotation to FC90-95% proved to be successful;

The cost for FC90% is competitive with F.G;

South Graphite expects to supply FC90-95% products to the market;

Continuous-High-Temperature Purification is the way to reduce the cost for high-grade

product.


Development on A.G

Low Carbon FC70%-FC80%

Medium Carbon FC90%-FC95% Floatation

High Carbon FC99% C-H-T

Flotation: Improve the milling process and proper foaming agent;

Plantation about to start construction, expect to supply FC90% above A.G by the end of 2015.

Purification


Raw Material Powder FC90% Ball-Milling Stirred Mill Stirred Mill

Raw Material Milling Flotation

Flotation Flotation Flotation

Competitive Advantage

Cost 20% lower than F.G on the same grade.

High Temperature Purification

Equipment is still debugging for industrial mass

production;

Low power consumption.

Purification


FC In FC Out P/P P.C/Ton

90% 99% 3.5h 4176kwh

99% 99.9% 4.3h 5208kwh

99.9% 99.999% 5.2h 6250kwh

FC90% A.G performs not as good as F.G;

The Proper way is to mix A.G & F.G in composite;

The composite will basically keep the performance while the cost would be lower.

Refractory

Application of Amorphous Graphite Application

0%

5%

10%

15%

20%

25%

Amorphous Composite Flake

Thermal shock resistance

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%


Anti-oxidation

A.G performance on MgO-C Experiment

The trend for carbon-contained refractory material is to lower its carbon content, which

requires it in small particle sizes, favors A.G.

Refractory


Pics of A.G performance on MgO-C Experiment



Cost 20% lower than F.G on the same grade.


Route for South Graphite

Trial production with some partners, expects to widely used in 2015;

Refractory manufactures showed great interests in it.

The introduction of A.G expects to bring the cost down by 2%.

The granular size of A.G makes it easier to shape with lower loss.

A.G performs better rate capacity compared with F.G, which allows the charge-discharge rate

performance better ;

Theoretically aspect, A.G will have better potential in E.V;

Li-ion Battery Anode Material


Industrial test is successfully conducted by TsingHua University & South Graphite;

South Graphite plans to invest on it in 2015.

Li-ion Battery Anode Material



Cost lower than F.G & S.G;

Better charge & discharge rate.

Isostatic Graphite is normally recognized as natural-graphite-not-related material;

Isostatic Graphite is the key material for some high-end equipment manufacturing;

Military- industry requires better quality isostatic graphite;

The Chinese government put it in the “strategy material list”;

The small granule size of A.G suitable for isotropy;

The cost will be lower than synthetic graphite.

Isostatic Graphite


Isostatic Graphite


Technical parameters Technical index

Density ( g/cm³ ) 1.78

Shore D 51

Flexure strength (Mpa) 39.2

Compressive strength (Mpa) 78.4

Elasticity modulus (Gpa) 9.8

Resistivity (μΩ.m) 11

Thermal conductivity (W/mk) 116

Expansion coefficient (10-6/K) (350-450℃) 4.5

Impurity (ppm) 50


Cost lower than S.G;

Good performance.

Index for I.G made from A.G

Application of Amorphous Graphite Conclusion

Conclusion

The lack of study on A.G makes it negatively judged;

More & more scientists in China studies on A.G, which will lead to further break through

on it;

A.G shows spacious of potential uses in many fields;

The on-going invest on A.G will be more rational than F.G, which allows the industry

healthy in China;

A.G might be a big threaten for F.G in terms of the uses on E.V;

Isostatic graphite is the next high-end use for A.G;

South Graphite will keep on develop and invest the applications on A.G.

chinese natural graphite supply applications of amorphous

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