The Syrah Resources Ltd (ASX: SYR) share price has had a positive start to the week and is up almost 6% to $4.33 in late morning trade.
This brings its year-to-date return to approximately 33%.
What happened?
This morning the graphite miner announced that it has signed a binding sales agreement with Zhanjiang Juxin New Energy Materials for 20,000 tonnes of natural graphite from the Balama operation in 2018.
This equates to approximately 11% to 12.5% of its targeted production of between 160,000 and 180,000 tonnes next year.
Disappointingly all other terms of the agreement are confidential, so it is difficult to gauge what price the company will receive for the product.
This was the case with its previous sales agreement with Jixi BTR Graphite Industrial which was announced in September. That agreement was for 30,000 tonnes of natural graphite.
Considering short sellers expect Balama to cause an oversupply of graphite and put pressure on prices, it would be nice to know what price the company is commanding for its product.
But with that data not forthcoming, investors will have to wait for its quarterly update next year.
In light of this, I would suggest investors wait for its next update before making an investment.
In the meantime, they may want to consider gaining exposure to the electric vehicle boom through resources shares such as Mineral Resources Limited (ASX: MIN) and Western Areas Ltd (ASX: WSA).
