Global Industry Analysis (2017 – 2020) – Growth Trends, and Market Forecast (2021 – 2025)
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Graphite: A Promising Material for Cleaner Energy Technologies
Carbon is present in two most well-known crystalline forms – graphite and diamond. Each have a unique arrangement of carbon atoms resulting in distinct physical properties, making them popular forms of carbon across major industries. Graphite derived from Greek word, ‘Graphein’, meaning ‘to write’, is a unique soft crystalline material that exhibits properties of both metal and non-metal. Graphite is one of the most promising materials in the era of technological revolutions. The renewable energy market is rushing to mine this rough diamond, as it is a vital material to renewable and cleaner energy generation such as solar panels and EV batteries.
In graphite, carbon atoms are organized hexagonally in a planar condensed ring structure, wherein layers are stacked parallelly. It is found in igneous and metamorphic rocks. It can be found naturally as well as produced synthetically. Synthetically in can be produced through wide range of carbon comprising substances such as coal tar pitch, petrochemicals, coals, and acetylene). At temperature levels higher than 4000oC (super-heated), the carbon atoms reorganize themselves into layers to from graphite.
Synthetic graphite is known to have better purity (over 99% carbon content) than natural graphite and is used is high-end applications wherein graphite purity is the priority. Graphite has excellent electrical conductivity, high mechanical strength, better lubricity, low coefficient of thermal expansion & friction, and good thermal shock resistance.
Synthetic Graphite Dominates but Immense Growth Opportunities for Natural Graphite
In 2019, an estimated 2.9 million tons of graphite (natural and synthetic) was consumed worldwide. Synthetic graphite accounted for more than 2/3rd of the total graphite market. It is used in range of applications including electrodes, graphite blocks, Li-ion battery anodes, synthetic carbon, lubricants, foundries, refractory materials, conductive fillers, coatings, graphite shapes, and re-carburising. Majority of the synthetic graphite is consumed for electrodes. These electrodes are used in electric arc furnaces (EAF) and melting furnaces in steel making and silicon plants. In the past few years, steel production with EAF technology has increased and is expected to boost the demand for graphite electrodes. Synthetic graphite is preferred as compared to its natural counterpart owing to its ability to handle very high electric currents due to its high conductivity and purity.
Natural graphite is available in two major categories: amorphous and flake graphite. Flake graphite holds more than half of the share of natural graphite and is one of the fastest-growing product categories owing to rise in demand from rechargeable batteries. Flake graphite is converted into spherical graphite (SpG), a product with superior purity and electrical conductivity making it an ideal material for anodes in Li-ion batteries. Due to its high temperature levels, natural graphite is preferred in refractories and as re-carburising material. Natural graphite flakes are used in the production of flexible or expanded graphite, one of the fastest-growing markets for Li-ion batteries. It is manufactured by treating natural flake graphite with diluted acid solution and heating to cause expansion in the process splitting the flakes apart. This product has huge market potential in thermal management and battery storage applications, which is anticipated to thrust the development of graphite market over the coming years.
Steelmaking to Remain Major Traditional End User, Battery to Exhibit Huge Market Potential
Steel production and other metallurgical activities such as refractories, recarburisers, foundry, and friction products are the largest consumers of graphite currently, accounting for more than 85% of the total graphite market. High purity graphite electrodes are consumed every 8-10 hours in steel manufacturing with EAF technology. Currently, EAF technology accounts for around 1/4th of the total steelmaking and the growth is expected to accelerate over coming years thus driving the demand for graphite electrodes. EAF steelmaking production is considered as a big winner in the race to produce steel in carbon neutral and eco-friendlier way. With growing demand for steel from various end users such as automotive, aerospace, and electronics, the demand for graphite is likely to boost over the years to come.
Rechargeable Li-ion batteries is one of the fastest-growing applications with a huge market potential for graphite. The world LIB production is anticipated to reach 1,500 GWh by 2025. Graphite is the most dominant anode materials used in Li-ion batteries. Graphite is most used in lithium manganese oxide (LMO), lithium cobalt oxide (LCO), and lithium iron phosphate (LFP) batteries. Although, batteries represent relatively small share in the global graphite market, with technological advancements the sector offers the largest growth opportunity for spherical and expanded graphite over the coming years. Li-ion battery growth is majorly driven by vehicle electrification, electronic devices, and grid storage.
Asia Pacific Will Continue to Dominate Demand for Graphite
Asia Pacific, led by China, remained the major consumer of graphite worldwide. China is the world’s largest producer of steel accounting for more than half of the total production (1,869.9 million tons) in 2019. In the past few years, China has ramped up the production of EAF steel mills wherein, graphite electrodes are in great demand. Furthermore, other countries in Asia Pacific region such as India and other Southeast Asian countries are expected to add new EAF-based steel mills over the coming years. This is expected to boost the growth of graphite in the region. Countries such as China, Japan, and South Korea are also of the largest producers of Li-ion batteries and battery materials, who are likely to offer huge growth potential for graphite.
Companies in Europe and North America are developing an integrated supply chain for graphite owing to rising response to the graphite anodes from the battery sector. Growing investment in e-mobility and battery grid storage is projected to enhance the consumption of graphite in these regions. Additionally, demand from traditional end users such as steelmaking and refractories is expected to remain stable over the coming years.
New Capacity Expansion, Strategic Alliances to Take Centerstage
In the past few years, the global graphite market has witnessed fierce competition. Both natural and synthetic graphite markets are consolidated, wherein companies with integrated business operations are dominating the synthetic graphite market. China based companies dominate the natural graphite market accounting for around 60% of the global natural graphite production.
In 2020, Imerys announced plans to expand its synthetic graphite capacity at its Bodio plant, Switzerland. The company aims to increase its presence in synthetic graphite value and plans to meet growing demand from Li-ion battery sector in Europe, Asia, and North America.
In 2020, Novonix Limited announced strategic alliances with Harper International Corporation to develop furnace technology. The specialized technology will enhance Novonix’s synthetic graphite production process. This partnership will enable Novonix to produce greater quantities synthetic graphite anode material and scale more quickly and cost effectively in the future.