Graphite Market Size, Share & Trends Analysis Report By Form (Natural, Synthetic), By Application (Electrodes, Battery Production), By Region, And Segment Forecasts, 2024 - 2030

“2030 graphite market value to reach USD 21.07 billion.”

Graphite Market Size & Trends

The global graphite market size was estimated at USD 16.52 billion in 2023 and is projected to grow at a CAGR of 3.7% from 2024 to 2030. The demand for graphite is anticipated to be driven by its usage in electrodes and refractories. The rise in the usage of electric arc furnaces (EAFs) owing to the global transition towards green steel is the main contributor for market growth. Moreover, graphite is consumed in producing crucibles, molds, and ladles to pour molten metal in the steel making process.

Drivers, Opportunities & Restraints

The easing of U.S. inflation levels towards the end of 2023 has resulted in the revival of government spending through the bipartisan Infrastructure Investment and Jobs Act. Also increasing private spending on manufacturing and the consumer markets has boosted investor confidence in the construction industry. With the requirement of electrodes in EAFs and refractories in the steel industry, graphite demand is anticipated to receive a boost over the next few years.

Rising construction expenditure is a key growth driver for the global market. For instance, in the U.S., according to the U.S. Census Bureau, construction spending increased by 7% in 2023 compared to 2022. It was 10% higher in April 2024 as compared to the previous year. The surge in spending is attributed to the rise in single-family housing and a decline in mortgage rates.

The increasing investments in electric vehicle battery manufacturing across the world is identified to be a key opportunity for the global market. Graphite is used as the anodic material in EV batteries. The year 2023 witnessed many automotive manufacturers such as Tesla, Honda, Volkswagen, and Maruti Suzuki investing in Electric Vehicle (EV)  plants. For instance, in November 2023, Tesla signed an agreement with the Government of India to set up an EV plant in two years. Meanwhile, it is currently looking at sourcing auto parts and batteries from the country.

The geopolitical situation is a key restraining factor to the global market. With graphite’s application in lithium ion batteries, geopolitics is playing an important role in shaping the future of battery supply chains. Various measures have been taken by countries across the world to shift away from Chinese dependency. For instance, the U.S.’ Inflation Reduction Act stipulates that sourcing raw material and components from Foreign Entities of Concern such as China, Iran, Russia, and North Korea will result in the prohibition of a home-manufactured EV to receive tax credits. As a result, automotive OEMs have started shifting its raw material procurement out of China, and to other countries in Africa. The restriction in availability of raw material from able sources is viewed as a key restraint to the market.

Price Trends Of Graphite

China is the largest exporter of graphite products such as flakes, uncoated spherical graphite, and anodes produced from natural graphite. As a retaliatory measure to the Inflation Reduction Act by the U.S., China placed export controls on graphite from December 2023 that greatly impacted prices, since it controls almost 75% of global supply. Prices witnessed a decline through 2023. For instance, graphite flakes were priced at a range of USD 530-575 per ton in December 2023, from average January 2023 prices at USD 830 per ton. However, this is anticipated to have only a short-term impact on global pricing levels, since there is adequate inventory in the global market.

The Chinese steel industry continued witnessing a slowdown in 2023, owing to delays in fiscal policy restructuring measures to offset the adverse impact of the Evergrande debt crisis. Moreover, there a slowdown in the growth rate of EV sales in China was observed in 2023. This subsequently resulted in a dip in demand and contributed to the price decline in 2023.

Market Concentration & Characteristics

The global market is at a medium stage of industry growth, indicating an accelerated pace of market growth. The market is fragmented in nature, owing to the presence of a large number of players engaged in mid-scale operations across the world. Large-scale players are investing in additional capital for brownfield expansions to remain competitive and improve customer reach.

The degree of innovation is moderate and is characterized by upgrading technology especially in light of the ongoing clean energy transition. Currently, companies are focused on sustainable mining activity and production processes. The key objective is to achieve a low-carbon footprint. Hence, they have been investing in new technology to achieve this goal.

The level of M&A activities remained low over 2023. The main strategic initiative that was adopted involved brownfield expansion, where key players invested in additional capacity to cater to demand from the renewables segment and the steel industry.

The regulatory impact on the market is nominal, and not very time consuming neither is it capital intensive nor considered a deterrent to new entrants. Players are governed by laws for mining licenses, environmental clearance and socio-economic impact. Operational production facilities have to adhere to common standards of quality and safety for smooth functioning and minimal impact to the social ecosystem and environment.

There are very few substitutes to graphite that are commercially available in key applications. There is ongoing R&D for alternative material to graphite, keeping in mind its energy-intensive production process, and carbon footprint. Silicon can be used in EV batteries as a substitute to synthetic graphite. Recycled carbon fiber can be used as a substitute to natural graphite.

End-user concentration is high, as it finds applications as electrodes and refractories in the steel industry, as lubricants in mechanical applications, as additives in the foundry industry, and anodic material in EV batteries.

Form Insights & Trends

“Synthetic graphite held the largest revenue share of over 67.0% in 2023.”

Based on form, the synthetic graphite segment led the market with the largest revenue share of 67.6% in 2023. Synthetic graphite is produced by the heating of carbon containing products (including petrochemicals, pitch, coal or acetylene). When super-heated (to temperatures higher than 4000°C) the carbon atoms rearrange into layers to form graphite. That is, synthetic graphite is commercially produced, and has greater purity than naturally occurring graphite.

It is hence more expensive than natural graphite and the production process is energy intensive. It is extensively in the production of graphite electrodes for applications such as solar energy storage and electric arc furnaces. It is also extensively used in the production of anodic material of EV batteries. The decline in synthetic anode costs owing to capacity expansion amidst weaker demand has resulted in the lowering of synthetic graphite prices. Hence, end-users are consuming more synthetic graphite than natural graphite.

Application Insights & Trends

“Battery production is anticipated to register the highest revenue CAGR of 4.4% over the forecast period.”

Based on application, the electrodes segment led the market with the largest revenue share of 35.1% in 2023. The graphite is a key component in lithium-ion batteries used in EVs and renewable energy storage. It is primarily used to reduce the charging time and increase energy storage density. Further, graphite is used in the production of electrodes and refractories. Both applications are extensively found in the steel industry. Steel is the building block of the economy, and is used in various key industries, of which construction and automotive constitute the highest share. Hence, the market is dependent on the growth of the steel industry.

The shifting trend of the industry towards green steel production, and sustainable construction practices are anticipated to provide market opportunities for steel, and subsequently the market. For instance, in the U.S., the Department of Energy has announced an investment through the Bipartisan Infrastructure Law and Inflation Reduction Act. It has allocated a fund of USD 6 billion for 33 projects in over 20 states, to decarbonize energy-intensive industries.

Other common applications of graphite include its usage in pencils, the electrical industry, and sports equipment. It accounted for about 17.0% of the revenue share in the global market.

Regional Insights

“China held about 66.0% revenue share of the overall Asia Pacific graphite market.”

The graphite market in North America is anticipated to be driven by infrastructure investment, which is anticipated to lead to strong steel industry growth rates in the coming years. Countries in the region, especially the U.S. and Mexico are focusing on accelerating their economic growth by investing in large-scale infrastructure development projects.

U.S. Graphite Market Trends

The graphite market in U.S accounted for the revenue share in North America in 2023. With the country’s presidential elections scheduled to occur in November 2024, a slew of economic reform policies and trade protectionism programs have been proposed by the presidential candidates. Upon implementation of these reforms, the U.S. economy is anticipated to be a key consumer of steel, and subsequently would drive the market growth.

Asia Pacific Graphite Market Trends

Asia Pacific dominated the graphite market with the largest revenue share of 54.2 in 2023, owing to the larger scale of crude steel production volumes. China, India and Japan are key steel producers in the region. In addition, there has been a significant boost to EV battery production in the Southeast, namely in South Korea. Japan and India are also key producers of EV batteries.

The graphite market in China accounted for the largest revenue share in Asia Pacific in 2023. Chine is the largest producer and consumer of graphite in the global market. Synthetic graphite increased in popularity owing to its application as battery anodes. Energy costs declined in the second half of 2023, owing to resumption of hydroelectric power in Yunnan, after a drought hit the region during the summer season. Yunnan is the country’s largest source of hydroelectric power. Hence, the falling energy cost and new graphite capacity resulted in increased consumption of synthetic graphite as compared to natural graphite.

Europe Graphite Market Trends

The graphite market in Europe has been impacted by the Russia-Ukraine war, which has resulted in increased energy cost, shortage of skilled labor and a rise in commodity prices. According to the European Union, graphite is considered a critical raw material. Currently, the region is dependent on imports to cater to its demand. With the development of the region’s EV battery value chain, graphite production capacity is anticipated to increase over the next few years.

The Germany graphite market accounted for a revenue share of about 29.0% in the Europe in 2023. The country is focused on boosting industrial output of EVs, sustainable energy, and green construction. Hence, electrodes, refractories and battery production are anticipated to drive graphite demand over the coming years.

Central & South America Graphite Market Trends

The graphite market in Central & South America is projected to witness at a significant CAGR during the forecast period, due to a slew of economic sectoral reforms in Brazil, Argentina and Chile.

The Brazil graphite market is anticipated to grow at the fastest CAGR during the forecast period. Brazil is aiming to become a key producer of graphite in the region. It was the fourth largest producer of graphite in the world in 2023. In May 2024, Appian Capital Brazil began the construction of a demonstration plant for graphite processing, as part of its national expansion strategy. This is being done with an investment of Real 350 million (~USD 63.6 million).

Middle East & Africa Graphite Market Trends

The graphite market in Middle East & Africa is anticipated to witness at the fastest CAGR of 3.4% over the forecast period. The African region is a key graphite producer. Mozambique, Madagascar and Tanzania are key producers, who ship a large amount of ore to China for processing. However, with China’s export duty bans, these countries are developing in-house processing capabilities that is expected to boost the market growth in the coming years.

Key Graphite Company Insights

Some of the key players operating in the market include Nippon Carbon Co., Ltd.,

• Japan-based Nippon Carbon Co., Ltd. was founded in 1915. It is a manufacturer of synthetic graphite and its products such as electrodes, powder, and anode materials

• NOVONIX Limited was founded in 2012 and was incorporated in Australia. Its Anode Materials Division that produces graphite is based in Tennessee, U.S. It is a manufacturer of battery-grade synthetic graphite and is focused on the North American market

Recent Developments

• In April 2023, NEXTSOURCE MATERIALS INC launched its Molo mine in Madagascar that can produce 17,000 tons of graphite per year. It aims to start annual production at a battery anode plant in Mauritius in 2024 with a production capacity of 3,600 tons

• In January 2023, Showa Denko K.K. and Showa Denko Materials Co., Ltd merged and formed Resonac Holdings Corporation. The graphite division of Resonac is headquartered in the U.S.

• In June 2022, Northern Graphite acquired the Lac des lles (LDI) mine in Quebec from Imerys. The mine has been operating for over 20 years and can produce up to 15,000 tons of graphite concentrate per year over the next two to three years

Graphite Market Report Scope

Global Graphite Market Report Segmentation

This report forecasts revenue and volume growth at global, country, and regional levels and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global graphite market report based on form, application, and region.

• Form Outlook (Revenue, USD Million, 2018 - 2030)

  • Natural Graphite

  • Synthetic Graphite

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Electrodes

  • Refractories

  • Lubricants

  • Foundries

  • Battery Production

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa