Graphite: Flake prices rising in China on higher demand and environmental closures

Natural flake graphite

Prices for natural flake graphite have risen in recent weeks as the market tightens, with the largest increases seen in grades above 95% C. A new round of processing plant closures has been reported in Shandong, which compounded already existing supply problems in the Province following drought conditions through the summer and limitations on the use of dynamite for mining. As well as affecting battery grades, the closures have resulted in higher prices for larger flake graphite used in expandable/expanded graphite and refractories.

Roskill view: Price rises are still way behind those seen for synthetic graphite for the electrode industry which are thought to have increased by up to 400% in recent months because of environmental closures in the pet-coke raw material supply chain. As steel producers have been unable to absorb these increases, price rises are now being pushed down on to steel customers. Demand for refractories and electrodes remains low as a result of poorly performing steel markets. The refractory market has been reportedly hit by large debts as iron- and steelmakers are finding it harder to meet their bottom line. Some refractory makers have reported debts of up to half their profits.

Meanwhile, demand for both natural and synthetic continues to increase from the battery industry with the strengthening EV market. Both General Motors (GM) and Renault have recently released their plans for increased EV output. GM plans to launch 20 EV models by 2023 as part of its journey to an all-electric future. Renault plans to double its EV offerings in the next five years and to strengthen its business in China. Panasonic announced the start of automotive lithium-ion battery production at a plant in Himeji, Japan from 2019; it already has five lithium-ion battery plants in Japan and supplies to Tesla.