Analysis on the Development Trend of Graphite Market

From 2016 to 2020, China's graphite shipments increased year by year. Among them, artificial graphite shipments increased from 77,000 tons in 2016 to 307,000 tons in 2020, with a compound annual growth rate of nearly 45%; Natural graphite shipments increased from 30,000 tons in 2016 to 58,000 tons in 2020, with a compound annual growth rate of 21%. The China Commercial Industry Research Institute predicts that China's artificial graphite shipments will reach 335,000 tons and natural graphite shipments will reach 64,000 tons in 2021. 

The global sales volume of new energy vehicles in 2022 was 9.56 million, and the anode market demand for graphite was 1.2 million tons. Due to the increasing processing costs, the price difference between artificial graphite and natural graphite expands, and natural graphite market share may increase in the future. Raw materials and graphitization account for a relatively high proportion of the cost of anode materials. Improving the capacity layout of raw materials and graphitization has become the key to ensure the release of anode capacity and improve profitability.

Under the background of double control of energy consumption, it is more difficult to expand the production of graphitization. Is the graphite market saturated? As an important link of anode materials, it has become an important scarce asset for leading enterprises to win in the future. Head anode manufacturers with high self-supply ratio in graphitization link may be able to effectively break through the bottleneck of production capacity and have more significant cost advantages. They are expected to enjoy the dividends brought by this round of industrial pattern iteration under the control of energy consumption, so as to achieve an increase in both quantity and profit.

Although there are graphite deposits all over the world (Asia, Africa, North America, etc.). However, graphite is not suitable for direct use in batteries and must be processed first. 100% of the world's processed graphite comes from China. Currently, there is no capacity to process graphite outside China. China is rich in graphite resources, which are distributed in 25 provinces (districts and cities) and 91 mining areas. The statistical data of the Ministry of Land and resources show that the reserves of crystalline graphite in China are 30.85 million tons, the basic reserves are 52.8 million tons, and the resources are 170 million tons.

Due to the high energy consumption attribute of graphitization capacity, the operating rate of graphitization stock capacity in some regions is limited, the implementation of new capacity is more difficult, and the scarcity of graphitization assets is highlighted, becoming the bottleneck of anode market expansion. Therefore, under the background of double control of energy and consumption,  the anode enterprises effective capacity depends on graphitization capacity. Anode enterprises with highly integrated capacity will have stronger delivery capacity and lower cost advantages in the future competition, and the competitive pattern of anode material industry is expected to be optimized.

Under optimistic and neutral expectations, the supply and demand of graphitization is expected to maintain a close balance between 2022 and 2023. While under pessimistic expectations, graphitization supply will not be able to meet the artificial graphite demand brought by the rapid expansion of global power batteries. For more information about graphite products, welcome your inquiry.