The First Graphene Ltd (ASX: FGR) share price has made a strong comeback today. This comes after the company announced that it has entered a non-binding memorandum of understanding (MoU) with Gerdau S.A.
During most of the day, the graphene producer's shares were trading in the red, as low as 23.5 cents. However, the company's latest news has given investors an upbeat perspective with its shares bouncing to 25.5 cents, up 6.2%.
What's moving the First Graphene share price higher?
The First Graphene share price is rocking higher today after releasing details of its MoU to penetrate the Americas.
According to its release, the MoU will look into Gerdau to distribute First Graphene's products in mutually agreed economic sectors and business areas. This includes territories such as Brazil, South America, and potentially the United States.
Furthermore, the MoU will allow both companies to set up formal proceedings to negotiate and establish a commercial agreement. Under the deal, First Graphene will provide Gerdau with its knowledge and technology for use in different Graphene applications. In return, Gerdau will invest and develop end-use applications and become the exclusive distributor for the company's products.
Quick take on Gerdau
Brazil largest steel producer, Gerdau is a leading manufacturer of long steel in the Americas region. The company has steel mills located in Argentina, Canada, Colombia, Mexico, the United States, Brazil, and many others.
It transforms 13 million metric tonnes of metal scrap heap into steel every year, used across an array of industries.
Management commentary
First Graphene CEO Mike Bell welcomed the partnership, saying:
We are pleased Gerdau recognises the enormous commercialisation opportunities graphene offers industry with the creation of a dedicated graphene division.
Gerdau's recognition of First Graphene as a key global producer is testament to the advances made by First Graphene in the commercialisation of this disruptive nanomaterial.
The association with Gerdau, a world leader in the long steel and specialty steel markets with a very strong position in the Americas, will undoubtedly accelerate the use of graphene across a wide range of applications.
Gerdau Graphene business unit general manager Alexandre Corrêa added:
We are enthused about the opportunities available to Gerdau in the graphene industry in the Americas. We have selected First Graphene as a partner because of their robust supply capability, product quality and technical expertise.
The First Graphene share price has accelerated by more than 88% over the past 12 months.
