Graphite Supply & Demand
Graphite uses and Future Demand
The unique properties of graphite open the potential for numerous new industrial applications. Current industrial uses include steel (carbon raisers), refractories, brake lining, and other automotive products, batteries, and lubricants.
The perceived largest growth area is associated with lithium ion batteries, which is currently the preferred battery source for electric vehicles. According to Industrial Minerals, graphite is the second-largest input material required in lithium ion batteries by volume. Another source suggests that these batteries require 20 times more graphite in a lithium ion battery than lithium. Currently, batteries account for roughly 5% of global graphite demand; however, there are some accounts that suggest that demand for lithium ion batteries, for use in various applications, is growing by 20% per year.
According to the Chinese Ministry of Science, the government aims to have one million electric-powered vehicles on the road by 2015, and electric car sales will exceed those in the US by 2020. Other growth areas that could require larger graphite sources are in fuel cells and in pebble-bed nuclear reactors.
- European Union and USA named graphite a mineral in critical supply Lack of exploration and development over last 20 years and China producing 70% of the world’s graphite, has made Li-ion battery manufacturers “very concerned” about securing long-term, stable sources of supply
- China discouraging export with 20% tax , 17% VAT and export licensing system
- Chinese production and exports expected to decline due to China’s strategy to keep value added manufacturing in the country
- Graphite market is more than 50 times larger than lithium and rare earths markets
- Demand for graphite increasing globally for green technology applications which have potential to consumer more graphite than all current uses combined
Supply for graphite can be grouped into two categories:
- 45% of graphite supply is in amorphous-form
- 55% of graphite supply is in flake-form
Global consumption of natural graphite has increased from ~600,000 tons in 2000 to 1.1 M tons in 2011:
- Flake graphite production is approximately 400,000 tons per year
- Global graphite reserves are thought to be around 71 million tons
Synthetic graphite output growing for use in specialist applications and in 2011:
- Production of primary synthetic graphite reached an estimated 1.5Mt.
- The largest tonnages come from the graphite electrode manufacturers
- Markets such as electrodes, recarburisers and shapes are all forecast to grow through to 2016.
- Carbon fibre, a high value market and is also expanding as producers target the replacement of steel in aerospace and automotive applications
- Industrial demand growing 5% per annum over last 10 years due to industrialization of emerging economies such as BRIC (Brazil, Russia, India, China) this contributing to the rising price of graphite today
- China produces over 70% of the world’s graphite or about 800,000 tons per year:
- Mainly low-carbon, low-value powder or small flake
- Declining production/exports and increasing costs
- Emphasis on value-added processing
- Export taxes, VAT, and export licenses imposed
Source: www.canaccord.com
“As battery manufacturers grow with the burgeoning automotive lithium battery industry, these manufacturers will need a stable supply of raw materials. Increasingly, they are looking for graphite outside of China. Today, there is annual demand for roughly 1.1 million tonnes of natural graphite … but 960,000 tonnes of that capacity comes from China. This leaves customers largely dependent on China as a source of supply.” – Byron Capital Markets, 2012