China has dramatically increased its graphite production, especially spherical graphite which is essential for lithium-ion batteries. As a result, China’s share of the global graphite market has surged from 70% to almost 80% during the last three years according to Fastmarkets battery raw materials analyst Georgi Georgiev. The expanded supply has led to lower prices, making it hard for other producers, particularly those in Africa, to compete. According to Geori, “When the prices were going up, we were seeing more supply from Africa. But with the price collapsing at the end of 2022 and throughout 2023, we saw less supply coming from African projects and more supply coming from China.”
China’s graphite production has skyrocketed, reaching 1.2 million tonnes in 2023, an increase of more than 65% since 2020, with much of this growth driven by state-owned companies, primarily from Heilongjiang.
Spherical graphite is particularly important for the booming electric vehicle market, where the demand for batteries is rising rapidly. According to BloombergNEF, electric vehicle sales are expected to increase 21% per year for the coming 4 years.
However, as demand for graphite continues to rise and traditional industries, the market is facing an expected supply deficit. This shortage is likely to push prices higher in the coming years. Analysts predict that while China currently dominates production, global demand could outstrip supply, especially for high-quality spherical graphite used in batteries. While the supply deficit combined with previously reported tariffs will present opportunities for producers outside China, significant investments in production capacity and technologies will be required to stay competitive in the evolving graphite market.
Read the full article at Proactive Investors.
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