The World Energy Outlook 2025, released by the International Energy Agency in November, points to deepening supply chain pressures, with graphite singled out as especially vulnerable. The report comes as battery demand accelerates and trade tensions affect access to key inputs. It outlines several challenges facing graphite markets, including supply concentration, weak system resilience, and delayed diversification.
Global Supply Concentration
Refining for nearly all critical minerals remains highly concentrated. A single country controls refining for 19 of the 20 strategic minerals tracked by the IEA, including graphite, with an average global share of around 70 percent. Supply concentration increased between 2020 and 2024 and is expected to decline only slightly by 2035.
Graphite Market Outlook
Battery-grade graphite demand is projected to grow 30 to 50 percent by 2035 under the IEA’s Stated Policies Scenario. Growth is even faster in the Net Zero pathway, driven by rising electric vehicle and grid storage demand. If all announced projects proceed as planned, supply could match demand by 2035. However, any delay would reopen major deficits and increase pressure on already tight markets.
System Resilience and Trade Risks
Graphite ranks among the least resilient of all battery minerals. If the largest refined graphite supplier is removed from the market, only about 35 percent of global 2035 demand would be met. This makes graphite more vulnerable than cobalt or lithium under similar stress scenarios. Trade restrictions introduced in 2024 and 2025 added further uncertainty. Export controls on graphite and other minerals caused immediate price spikes. In the event of a major disruption, the IEA estimates that battery pack costs could rise by 40 to 50 percent.
Price Collapse in 2024
Worth noting is that battery prices fell sharply in 2024, marking the largest annual drop since 2017. The average battery pack cost declined by about 20 percent. This was partly driven by falling prices for graphite, lithium, nickel and cobalt. While lower material costs offered a temporary boost to battery manufacturers, the IEA cautions that this trend may not last if supply disruptions return or new projects stall.
Diversification Potential
Some diversification progress is underway. Emerging graphite projects in Mozambique and Madagascar could deliver around 130,000 tonnes of battery-grade spherical graphite by 2040. These developments would modestly reduce global dependence on a single supplier but are not enough to fully secure Europe’s long-term needs.
Implications for Europe
For European battery producers and material processors, the IEA’s findings underline a structural supply risk. High electricity prices, limited refining capacity, and growing demand make Europe vulnerable to price swings and upstream disruptions. With graphite playing a central role in battery anodes, secure and diversified supply will be critical for maintaining industrial competitiveness in the clean technology sector.
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