【Anode Material】Industry Status and Trends

 Industry Overview

The upstream of lithium battery anode materials mainly includes chemical products such as petroleum coke, needle coke, and pitch coke. The midstream involves anode material preparation, while the downstream sees applications of lithium batteries across various fields. Currently, lithium battery anode materials are primarily divided into carbon-based and non-carbon-based categories, with graphite-based anode materials being the most commercially utilized. These graphite-based anodes include artificial graphiteand natural graphite.

Dominance of Artificial Graphite

With the growth of lithium battery shipments in China, the demand for four key materials for lithium batteries has increased. Specifically, for anode materials: in 2016, China's anode material shipments were 118,000 tons, which significantly rose to 1.65 million tons in 2023, reflecting a year-on-year increase of 20.44% and an average annual compound growth rate of 45.8% from 2016 to 2023. China's global share of anode material shipments has steadily increased from 62.11% in 2016 to about 90% in 2023, marking a historic high. Given China's global competitive advantage in the lithium battery supply chain, this share is expected to remain high. China's anode material shipments are projected to continue double-digit growth, driven by downstream demand. Artificial and natural graphite dominate the industry, with artificial graphite showing a sustained growth trend. Specifically, artificial graphite shipments increased from 79,000 tons in 2016 to 1.4685 million tons in 2023, with a compound growth rate of 51.8%, outpacing the overall growth rate of anode materials. The share of artificial graphite in China's total anode materials rose from 66.95% in 2016 to 89.0% in 2023, up by approximately 5 percentage points from 2022. The share of artificial graphite is expected to remain above 85%, with short-term fluctuations influenced by raw material price changes, advancements in various anode materials, and shifting downstream demand.

Major Companies and Competitive Landscape

Japan led the commercialization of lithium batteries in the 1990s and held a dominant position in the anode material market, with over 90% global market share before 2000. Mitsubishi Chemical excelled in modified natural graphite, while Hitachi Chemical and JFE were leaders in artificial graphite.
China's anode material development has evolved from reliance on imports to technological accumulation. The rapid growth of the domestic new energy vehicle market has significantly boosted China's lithium battery supply chain's competitiveness, leading to a notable increase in global market share. In 2021, China's share of global anode material shipments reached 75.8%, with BTR, Shanshan, and Putailai as the top three, holding global market shares of 17.3%, 10.7%, and 10.2%, respectively. Currently, major global anode material companies are concentrated in China, Japan, and South Korea, with China holding a clear advantage.
With a new round of industry expansion underway, the lithium battery supply chain's segments, including anode materials, will enter a new phase of industry reshuffling. Companies with scale advantages, cost benefits, and key technologies that align with industry trends are expected to succeed. Leading publicly listed Chinese companies in the anode material sector include BTR, Shanshan, and Putailai.

Development Trends

Given the characteristics of downstream demand, the nature of the lithium battery industry, and the current state of anode materials, the future development of anode materials is expected to focus on the following aspects:

1. Artificial Graphite Remaining Mainstream: Artificial graphite anode materials meet the cycling life and safety requirements of power and energy storage batteries. With the anticipated growth of the new energy vehicle market and energy storage battery market, artificial graphite is expected to remain the main application, with shipments and market share staying high.

2. Significant Integration Trend: Initially, anode material companies mainly outsourced the graphitization process, but they are expected to gradually shift towards an integrated approach, establishing cost advantages through comprehensive process layouts. The main logic includes:

1. The growing prospects for lithium batteries in energy storage and power batteries highlight cost importance in the global competitive era, making integration an effective strategy for achieving cost advantages.

2. Graphitization costs are significant, comprising over 45% of the production costs of artificial graphite anodes.

3. As other anode material processes mature, graphitization will become a key cost-control point and is essential for quality control in artificial graphite products.

3. Focus on High-Energy-Density Silicon-Based Anode Materials: As consumers increasingly demand longer driving ranges, high-energy-density batteries are critical for achieving extended range, with battery energy density largely dependent on the anode and cathode materials. Traditional graphite anodes, with a theoretical capacity of 372mAh/g, have almost reached their energy density limits.
Silicon-based anode materials are a significant area of research among non-carbon materials, with potential for large-scale application. Theoretically, silicon has a much higher energy density of 4200mAh/g compared to traditional graphite anodes. However, challenges such as large volume expansion and poor cycle performance limit its replacement of graphite anodes. The use of composite materials combining nano-silicon or silicon monoxide with graphite helps increase the proportion of silicon in existing graphite anodes, thus enhancing energy density.

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