Roskill reports that the demand for natural and synthetic graphite is increasing. The main driver for the price increase is from its use in batteries for electric vehicles.
Refractories for the steel industry were an important source of graphite demand in the past. However, analysts predict that the major driver for increasing graphite demand will now be battery anodes in lithium-ion batteries.
Lithium-ion batteries are used in electric vehicles, smartphones, laptops, and other handheld electronic devices.
According to BNN Bloomberg, depending on the material used as the cathode, a lithium-ion battery requires up to 15 times more graphite than lithium.
The publication also notes that an electric vehicle like the Tesla Roadster uses 110 kilograms of graphite per vehicle. Other major automakers are introducing their own versions of electric vehicles and will need lithium-ion batteries to power them.
China is the leading global exporter of graphite, but the country’s graphite output significantly declined after the government shut down industries that were causing too much pollution. India is the second largest producer of graphite, and Brazil is the third.
Sri Lanka exports graphite too but that is vein graphite, which is expensive due to its rarity and purity. The most sought-after type of graphite is flake graphite as it is more abundant than vein graphite and still has a good purity level to be used in lithium-ion batteries.
Flake graphite is available in different sizes and purities. Non-battery applications of graphite (mainly refractories in the steel industry) use flake graphite with purity levels of 90-97%.
Graphite with a larger flake size and higher value is priced higher, but in general, flake size is the primary driver of value in flake graphite.
The United States (US) is the leading importer of graphite and will probably remain so due to the growth of electric vehicle production in the country.
However, the demand for graphite will increase all over the world as more countries embrace electric vehicles as a greener form of transport. Statista predicts that the global market value of graphite will increase to $18.2 billion in 2021 from $12.5 billion in 2016.