Roskill on Graphite: Watch China and Batteries in 2016

Roskill Information Services published a report that looks at the changing face of the graphite industry. In particular, it points to 2015 as “a year of major change,” largely due to China reaching peak steel production and to troubles in the Chinese economy. Overall, while the Asian nation’s dominance as a graphite producer still holds, its position at the top does seem to be wavering.
Trends to look forward to in 2016 include:

Lithium-ion batteries to save the day?
In China, higher levels of EV subsidies have encouraged sales of these vehicles in recent years. By the end of 2015, cumulative Chinese sales of EVs and PEVs (plug-in electric vehicles) totalled >0.25M; over half of these sales occurred during 2015. As the new five-year plan of the Chinese government is released, we expect a further push away from traditional vehicles. Meanwhile, Tesla has created a large buzz as it builds its lithium-ion ‘gigafactory’ in Nevada, USA. The factory will provide batteries for use in up to 0.5M vehicles if and when it reaches full capacity.
If even a small amount of the proposed global growth in lithium-ion batteries comes online from EVs and stationary storage, it will have a large impact on demand for both synthetic and natural flake graphite. But consistently low oil prices are likely to limit the consumer uptake of alternative vehicles, at least in the short-term.
Natural and synthetic graphite go head to head
Graphite is used in the anodes of lithium-ion batteries and production of anode material takes place almost entirely in China. Both natural and synthetic graphite compete for use with the choice coming down to performance and cost. Natural graphite needs to be purified and shaped to form spherical graphite in order to achieve a similar purity and the specifications provided by synthetic graphite. For many years, natural graphite offered a less expensive alternative but, with synthetic graphite prices beginning to fall in 2015, Roskill expects that these two graphite products will come into increasing competition in the coming years.

Click here to read the full report from Roskill.