A reduction in waste levels and a preference for economical
material with high upgrade potential are likely to determine
future demand for natural flake graphite in the batteries
Growth in natural flake graphite consumption has been
closely related to its use in lithium-ion (Li-ion) batteries,
anticipated to be the only sector to push up consumption rates
in what is otherwise a fragile market.
A long-predicted rise in demand for battery grade graphite
is gradually gaining pace, owing to increasing global interest
in electric transport.
Li-ion battery-powered applications now span much more than
the widely touted examples of smartphones, tablet computers and
electric vehicles (EVs).
Graphite for use in battery end markets, whether naturally
mined or synthetically produced, is consumed in two forms:
spherical and finely ground, pure powder.
Although the tug of war between the use of natural and
synthetic graphite in the battery industry persists, natural
flake has an edge when it comes to production costs and selling
prices as it is considerably cheaper than synthetic graphite.
However, the latter has the potential to be more consistent in
terms of supply and purity – two important criteria
for battery makers.
Natural graphite accounts for around 40% of the current
feedstock material for battery anodes, with synthetic graphite
accounting for the remaining 60%. Nearly all natural spherical
graphite is produced in uncoated form in China, with small
volumes produced in Japan and Korea.
According to the IM Prices Database, prices
for uncoated spherical graphite from China range between $2,500
and $3,000/tonne, while coated material stands at
$6,000-10,000/tonne. For synthetic spherical graphite, the
prices nearly double to as much as $20,000/tonne.
Growth in flake graphite demand has received the most
attention in the Li-ion battery sector, which is largely driven
by demand for EVs, although improved technologies and advanced
One group of estimates suggest that it takes three tonnes of
natural flake graphite to make one tonne of spherical graphite,
while others note that this ratio is contracting.
This is mainly due to the reduction in wastage offered via
advanced processing technologies, which are gaining pace and
leading to a reduction in total flake graphite requirements per
unit mass of spherical graphite produced.
According to IM sources, waste ratios have
fallen in the last few years from as high as 70% to less than
45%. This decline is likely to continue.
The decline in waste ratios is set to slow demand for
natural flake graphite for spherical production in the medium
term, although a drop in wastage levels will still mean that
1kg of anode graphite will require an input of 1.67kg of flake
As such, demand from Li-ion batteries, driven by growth in
the EV and hybrid EV markets, will remain a major contributing
factor in increased demand for natural flake graphite in the
near term, unless the material is replaced with substitutes
such as synthetic graphite or silicon anodes.
This evolution is likely to raise concerns over the future
of battery grade graphite, as some manufacturers have started
to use a blend of both natural flake graphite and other
substitutes for consumable applications, limiting demand, with
manufacturers switching from a flake graphite base to synthetic
Silicon, on the other hand, has issues with charging states,
advancing the degradation of battery capacity after relatively
few charging cycles, which is why some battery manufacturers
use only a small amount of silicon infused into a graphite
anode to minimise capacity loss while still utilising the
benefits of the material.
Rise and fall of China’s
spherical graphite exports
Falling Chinese exports
Spherical graphite exports from China dropped by 40% in the
first half of 2015 compared to H2 2014, owing to weak demand,
with limited movement seen in prices for battery grade
Chinese producers are facing increased scrutiny around the
environmental impact of their operations, which is likely to
influence the supply/demand balance in the future.
With similar downward trends observed in flake and amorphous
graphite trades from China, the consistency of graphite supply
is being threatened, which could lead to a potential supply
shortage in the near term.
This, combined with growing demand for battery grade
graphite in China and elsewhere, will pave the way for new
flake graphite supplies being developed outside China in order
to meet the growing needs of the Li-ion battery manufacturing