Graphite: Flake prices up 25–36% in October as prices rise for the first time since mid-2016

Graphite Flake

Roskill view: Throughout 2017, the graphite industry has been poised for flake graphite price increases, a forecast that has finally begun to be realised this month. Price increases are driven by rapidly growing demand from the use of flake graphite in lithium-ion battery anodes batteries. Chinese producers are expected to be able to meet demand, initially, by increasing production rates of spherical graphite and by drawing down on raw material stocks. Many Chinese producers of spherical graphite (the final processed flake graphite product supplied to the battery industry) are thought to have significant overcapacity. In the longer term, however, questions still remain on the ability of new sources of graphite to come-online and to meet the growth in demand. Coupled with a backdrop of continuing closures of processing plants in China, as the country tries to improve its environmental credentials, the scene has been set for speculation and price rises.

Only prices for the highest carbon grades (94-97% C) were quoted to rise in October. These are the grades best suited for use in batteries as they require less purification. The largest prices rises were seen in fine and medium flake sizes. Fine flake increased by 36% to an average of US$863/t while medium flake increased by 31% to US$953/t according to Industrial Minerals. Small and medium flake sizes are typically used in the production of spherical graphite, a process which involves shaping with low yields and high levels of wastage at 30-70%. The higher price of large flake graphite makes it less suitable for this application. Large flake graphite is, however, used in expandable/expanded graphite, a much smaller market than batteries but one that is also growing rapidly. Large flake prices grew by 25% in October to average US$998/t.

Prices for high grade material is forecast to continue rising through late 2017 and into 2018 as battery demand continues to rise and flake graphite producers rush to ramp-up new production.

Roskill’s Natural & Synthetic Graphite: Global Industry, Markets & Outlook report was published in May 2017. Click here to download the brochure or sample pages or access further information.