Graphite Market

What is Graphite?

An important input material for modern life, Graphite is all around you — it’s in your smartphone, television, computer, tablet, and in all lithium-ion batteries.

A non-metallic mineral, Graphite is one of two natural forms of carbon (the other is diamond). With the highest natural strength and stiffness of any material, graphite is an excellent conductor of heat and electricity. It is stable over a wide range of temperatures. Graphite is a highly refractory material with a high melting point (3650°C). Graphite has a high natural lubricity and is one of the lightest of all reinforcing agents. While chemically inert, Graphite also has a high resistance to corrosion.

Graphite, specifically, Coated Spherical Graphite — or ‘CSPG’ — is used to manufacture the anode in a Lithium-ion (Li-ion) battery.

agc-coosa-half-core

Graphite Facts

“The United States has no domestic production of natural graphite, but it is consumed by roughly 90 U.S. companies. Major producers of natural graphite include China (70%), North Korea (10%), and Brazil (8%). Top-quality flake graphite will likely see an increase in demand in the coming years; meanwhile the supply looks to be steady at best, and there are concerns about potential export controls out of China.”

THE UNITED STATES DEPARTMENT OF DEFENSE
STRATEGIC AND CRITICAL MATERIALS 2015 REPORT ON STOCKPILE REQUIREMENTS
January 2015

graphite Facts

Graphite is a critical strategic mineral (the USA has declared graphite a supply critical mineral; the European Union declared graphite a critical raw material)

The United States currently imports 100% of all graphite consumed

Although there are ~200 graphite applications, the one with the most significant and enduring future demand is lithium-ion batteries (graphite is used to manufacture the anode in a lithium-ion battery)

Each electric car contains more than 100 pounds of coated spherical (CSPG) graphite

It takes 10 to 30 times more graphite than lithium to make a lithium-ion battery — the minimum graphite purity required is 99.95% Cg

Future graphite demand is driven primarily by the expanding lithium-ion battery markets (transportation and stationary battery markets)

Graphite’s unique properties make it the ideal anode material for lithium-ion batteries; however, clients require CSPG graphite — not traditional run-of-mine graphite

China, who controls ~75% of global graphite production, has imposed a policy of resource nationalization, including export duties, licenses and environmental restrictions on new and existing mines

One cannot have a ‘green’ car with a ‘dirty’ battery. Graphite production is the cause of significant pollution in China, due to poor mining practices and low environmental standards. Battery manufacturers are being held accountable by consumers to source graphite from environmentally responsible and sustainable producers

Global consumption of natural graphite doubled from 2000 to 2010

Tesla Motors’ GIGAFACTORY alone — currently under construction in Nevada and slated for commissioning in 2017 — will more than double the current global lithium-ion battery demand

Demand Drivers

The market growth for graphite comes from lithium-ion batteries. Batteries represent the most significant demand driver for battery-grade (coated spherical or ‘CSPG’) graphite.

There are two types of CSPG graphite used in Li-ion batteries — synthetic (~USD$20,000* per tonne average selling price) and natural (~USD$8,000-$11,000** per tonne average selling price). Due to cost and performance efficiencies, many battery manufacturers are transitioning to natural graphite.

Within the lithium-ion battery market itself, there are three main market segments.

  1. Transportation Batteries: to power electric vehicles; the electrification of automotive is evolving rapidly from niche to mainstream (significant forecasted growth)
  2. Stationary Storage Batteries: energy storage for electrical grid, commercial and residential buildings; also referred to grid-storage batteries (exponential forecasted growth)
  3. Consumer Electronics Batteries: smartphones, laptops, tablets, wearable electronics, power tools, and other battery-powered devices (moderate forecasted growth)

TRANSPORTATION BATTERIES

ALL APPLICATIONS IN ENERGY CAPACITY BY REGION AND GLOBAL REVENUE (2013-2020)

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Overall, battery sales into the transportation sector will grow from 18.5 GWh in 2015 to 40.3 GWh in 2020. Revenue will grown from USD$5.7 billion to USD$9.2 billion, reresenting a CAGR of 9.8% (source: Cairn Energy Research Advisors, 2015)

STATIONARY BATTERIES

ALL APPLICATIONS IN ENERGY CAPACITY BY REGION AND GLOBAL REVENUE (2013-2020)

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Stationary storage battery sales will grow from 671 MWh in 2013 to 8.2 GWh in 2020. The 2015 to 2020 forecasted CAGR is 51.1%. Revenue will grow from USD$2.3 billion in 2013 to USD$4.8 billion in 2020. The forecasted CAGR for revenue growth between 2015 and 2020 is 12.4% (source: Cairn Energy Research Advisors, 2015)

ALL BATTERY MARKET SEGMENTS

GLOBAL BATTERY FORECAST — TRANSPORTATION, STATIONARY AND CONSUMER ELECTRONIC SEGMENTS COMBINED (2013-2020)

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The global battery market will nearly double in size from 47.7 GWh in 2013 to 96.6 GWh in 2020, representing a 5-year CAGR of 8.7% for the next 5 years (source: Cairn Energy Research Advisors, 2015)

PANASONIC’S FORECAST FOR LITHIUM-ION BATTERY GROWTH

TOTAL REVENUE (2014-2025)

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(source: Benchmark Mineral Intelligence/Panasonic Corporation, 2015)

* SOURCE: INDUSTRIAL MINERALS (OCTOBER 2015)
** SOURCE: BENCHMARK MINERAL INTELLIGENCE (SEPTEMBER 2015)