The Syrah Resources Ltd (ASX: SYR) share price collapsed 35% to 46 cents in trade today after the Africa-focused graphite miner shocked investors today with a series of warnings on how its travelling.
The miner flagged that a "sudden and material" decrease in spot graphite prices in China due to tariff tensions, among other factors, meant it planned to slash production for now as it's likely not profitable to keep operating at current prices.
Worryingly, it also suggested it did not expect any improvement in graphite prices over the rest of the calendar year.
It also flagged a US$60 million to US$70 million write down on the value of its existing assets and a US$5 million write down of existing mined graphite inventory.
CEO, Shaun Verner, said, "Balama hosts the world's most significant graphite ore body with a mine life of over 50 years.Our available liquidity and cost reduction initiatives allow for flexibility to manage our near term production volumes in line with demand growth, and to ensure that price premiums reflect Syrah's longterm supply of high quality graphite."
There's nothing quite like a big profit downgrade to ruin your day, unless you're a short seller of course and Syrah has long been a target of 'shorts' with 14.6% of its outstanding scrip shorted as at September 4, 2019.
One blue-chip miner bucking the downward trend on the S&P/ ASX200 today is BHP Group Ltd (ASX: BHP), which has lifted 0.5%.
