Kerry Satterthwaite, Carbon & Chemicals Division Manager and Sue Shaw, Senior Analyst at Roskill, tell Proactive Investors’ Andrew Scott that graphite prices are currently very high due to tightening markets for both natural and synthetic graphite in lithium-ion batteries and synthetic graphite in electrodes.
Synthetic graphite price rises are the result of a perfect storm of conditions in China. Firstly, environmental plant closures in the raw material coal needle coke industry hampered the production of graphite electrodes. At the same time, consumption of graphite electrodes in electric arc furnaces (EAFs) began to rise as the Chinese government took steps to halt production of poor quality induction furnace steel. Scrap steel was banned from sale to such furnaces in early 2017, becoming available for use in EAFs. Meanwhile, needle coke is being increasingly diverted into the battery market.
Demand for both synthetic and natural flake graphite in battery applications is forecast to grow by 5-8%py over the decade between 2017 and 2027, depending on the uptake of electric vehicles (EVs) and energy storage – the largest end-use applications for lithium-ion batteries. Roskill forecasts that global sales of EVs and hybrid vehicles will increase rapidly in the coming years and could account for 69% of all motor vehicle sales by 2027.