Why did the Syrah share price jump 80% in two days?

This graphite miner's shares have been on fire this week. But why?

| More on:
A woman is excited as she reads the latest rumour on her phone.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Syrah Resources Ltd (ASX: SYR) share price was shooting higher again on Tuesday before giving back its gains and more.

At one stage, much to the dismay of short sellers, the graphite producer's shares were up as much as 27% to 95 cents.

When the Syrah share price reached that level, it meant it was up almost 80% in the space of two sessions.

At the time of writing, the company's shares are down 6% to 70.5 cents.

What's going on with the Syrah share price?

Investors have been scrambling to buy ASX graphite shares this week after China announced plans to restrict exports of the battery-making ingredient.

As we covered here yesterday, Reuters is reporting that China's commerce ministry revealed that the move was "conducive to ensuring the security and stability of the global supply chain and industrial chain, and conducive to better safeguarding national security and interests."

While this may not be great news for electric vehicle manufacturers, it could be a big win for Syrah Resources.

Graphite prices have been so low this year that it hasn't been able to operate its Balama project at full capacity. Instead, the company has shut down its operation and brought it online for month-long campaigns to conserve cash.

For example, last week the company revealed that in the last quarter, a single production campaign took place and produced 18kt at a 73% recovery.

Balama C1 costs came in at US$484 per tonne during the operating period, which was just a fraction lower than its weighted average sales price of US$528 per tonne. In addition, C1 fixed costs were US$4 million per month during the shutdown period.

If China does restrict exports, buyers may be forced to source their graphite from producers like Syrah Resources. This could mean better weighted average sales prices and full steam ahead for its operations. Time will tell if this is the case.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

What does Macquarie think Liontown Resources shares are worth?

Let's see if analysts think that this lithium miner is in the buy zone or best avoided.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Materials Shares

Lynas shares charge higher on big news

What is getting investors excited today? Let's find out.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Liontown Resources shares roar higher on big news

This lithium miner is catching the eye with some big news. Here's what is happening.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

What does Macquarie think BHP shares are worth?

Is now a good time to buy the miner's shares? Let's find out.

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Materials Shares

What does Macquarie think Pilbara Minerals shares are worth?

Is this lithium miner dirt cheap? Let's find out.

Read more »

Two miners standing together.
Materials Shares

Is it time to buy this beaten down lithium share?

This diversified miner’s share price has been hit on multiple fronts. What does it mean for investors?

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Pilbara Minerals share price falls on 30% quarterly revenue slump

ASX investors are bidding down Pilbara Minerals shares on Thursday. Here’s why.

Read more »