Factors That Could Affect the Graphite Market in 2024

Graphite is a critical mineral used in electric car batteries as well as in pencils, cores for nuclear reactors and brushes for electric motors, among other things. As the use of electric cars continues to grow globally, the demand for this particular metal is expected to increase.

The mineral, either natural or synthetic, can be used in battery anode applications. It is usually built into the anode, with each battery containing anywhere from 50–100 kg of graphite. While synthetic graphite currently occupies a larger share of the market, end users abroad prefer using more natural graphite instead of synthetic graphite in a bid to meet ESG standards and reduce emissions. This is primarily because the production of synthetic graphite anodes emits about four times more greenhouse gases in comparison to the production of natural graphite anodes.

Below, we look at key trends in the graphite market in the last couple of years as well as its 2024 forecast.

Currently, China controls roughly 80% of the production of synthetic graphite globally. By the end of 2022, the country’s graphitization capacity had surpassed two million tons. This expanded capacity greatly reduced the cost of synthetic graphite production.

Despite this, the growth of electric vehicle sales abroad as well as in China started losing momentum early last year, resulting in lower synthetic graphite prices and less downstream demand.  Increasing synthetic material supply and falling prices also led to a decrease in the prices for natural graphite anode material.

It is expected that China will play a significant role in determining factors on the supply-side in 2024. In an email, Project Blue cofounder Dr. Nils Backeberg stated that the supply of synthetic and natural graphite from current graphite producers as well as natural graphite projects in Africa and new-built synthetic graphite capacity in China would maintain balance in the metal’s market this year.

Last year, we saw graphite companies secure funding from European Union and U.S. government initiatives for the development of projects and supply chains abroad. This is expected to continue this year.

Producers of anodes in South Korea and Japan, which are dependent on graphite imports from China, have considered stockpiling the mineral in the near-term to meet consumer demand while awaiting their approvals for export licenses. Investors may also expect to see more efforts to establish graphite supply chains for electric car batteries abroad this year as well as in the future as European and North America governments work to decarbonize their economies.

With regard to advancements in battery anode chemistry, China is expected to record an increase in silicon-carbon composite production capacity this year. Silicon-carbon materials increase charging speeds and battery range, which appeals to a broader audience, particularly in the West.

Entities such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are working to avail natural graphite in North America, and the success of such companies could ease the concerns arising out of the overdependence on an unpredictable China as a supplier of these vital minerals.

NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF

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