Syrah Resources reported a significant widening of its half-year loss on Monday, as graphite production and sales dropped sharply due to an oversupply in China, a key market.
The Australian mining company’s net loss increased to A$67.1 million for the six months ending June 30, up from A$38.6 million in the same period last year. Revenue also declined by 33%, falling to A$19 million.
Graphite, a crucial component in electric vehicle batteries, is largely supplied by China, which dominates over 70% of the global market for both natural graphite and its synthetic counterpart. Synthetic graphite is made from petroleum coke or coal tar, by-products of oil and coal processing.
China’s graphite production surged to approximately 1.2 million metric tons in 2023, up from about 700,000 tons in 2020. Until recently, China had been a major market for exporters like Syrah.
However, in the first half of the year, Syrah sold no graphite to China due to “intense competition and oversupply in the Chinese synthetic graphite active anode material (AAM) market.”
Production at Syrah’s Balama operations in Mozambique fell by 38%, reaching 34,900 tons during the period. Sales dropped to 29,800 tons, down from 44,700 tons in the same period last year.
Despite the challenges, Syrah shipped graphite to third-party customers in markets outside China, particularly Indonesia, reflecting the growing demand for non-China-sourced natural graphite AAM.
Additionally, the company sent 500 tons of graphite to its Vidalia AAM facility in the United States, which began production in February.
