See you later Syrah (SYR)
Stock
Syrah (SYR) $0.48 as at 10/09/2019
Event
Graphite miner and processor Syrah has taken a big hit today on the back of a company update regarding spot prices of their product in China. The company recently dipped out of the ASX200 index at the June rebalance and seems to be going out the back door with this update.
Prices received have dropped around 12% in the current quarter versus what the company was receiving the Q2, down to $US400/t, blaming the fall on a falling Chinese Yuan as well as concerns around inventory levels saying “supply growth has outpaced demand” despite China becoming a net importer at the start of the year. This problem is facing many producers of minerals that are used in batteries where supply was ramped up a few years ago when prices spiked on demand forecasts which proved a little premature.
In response, Syrah has moved to cut production and review cost levels at their Balama facility as well as flagging an impairment charge of up to $US70m and writing down inventory levels. The company talked up its cash levels despite the disappointing prices.
Syrah (SYR) Chart
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