The battery-anodes segment has always been dominated by
carbon-based material, from Mesocarbon microbeads (MCMB) to
natural graphite and, finally, synthetic graphite. In the short
term, synthetic graphite will maintain a dominant share in the
sector while natural graphite’s market share will
continue to gradually expand, industry participants said.
China is a major producer of electric vehicle (EV)
batteries, with its domestic output of lithium-ion power
batteries at 65 GWh in 2018, a 61.3% share of the global total,
market participants said.
Lithium-ion batteries use a cathode, an anode and an
electrolyte as conductor. Anode materials account for 25-28% of
the production costs for each lithium-ion battery. China
recorded about 265,000 tonnes of anode material shipments in
2019, of which artificial/synthetic graphite accounts for about
79%, while the rest is mostly natural graphite, according to a
market analyst based in China.
Market participants mostly believe that, short term,
graphite material will be at the core of the underlying trends
in the anode sector. This includes both artificial and natural
graphite, given that the two materials have been produced and
Synthetic vs natural
The debate around the use of natural or synthetic
graphite in anodes is still ongoing across the industry.
"Artificial graphite and natural graphite demonstrate
specific advantages in the application of anode material," a
producer of flake graphite in China said. "In order to be
suitable as an anode material for lithium secondary batteries,
the following conditions must be met: high charge and discharge
capacity (per unit weight or volume); small initial
irreversible capacity losses to ensure the long use of the
battery; excellent charge and discharge cycle attributes; high
electrical conductivity; eco-friendly material; and easiness to
source at a low price," the producer said.
"It’s rare to find materials that fit all
requirements. But synthetic graphite has superiorities in
cyclic performance for longer life, efficiency in the charging
and discharging process and compatibility with electrolytes,
which means it gets used most often in the power battery market
and high-end consumption market," the producer added.
Synthetic graphite is produced by heating carbon precursors
- such as petroleum, coal tar and coke - at temperatures higher
than 2,800°C. This implies significant energy costs in the
production process. "Natural graphite, mined from natural
mines, stands out as the other [main] carbon anode material
with its high capacity and lower cost," the same producer
Fastmarkets’ assessment of the price of
graphite spherical 99.95% C, 15 microns, fob China stood at
$2,500-2,600 per tonne on Thursday March 19, stable since the
second half of August in 2019. This grade, as assessed by
Fastmarkets, is from natural graphite and is uncoated; the
material would then require prior coating to be ready for use
in battery manufacturing. Natural-based graphite material is
typically cheaper than its synthetic counterpart.
Market participants have reported the price of
synthetic-graphite anode material to be at around
40,000-100,000 yuan ($5,635-14,054) per tonne as of March 23,
Material characteristics also vary between natural-based and
synthetic-based graphite used in anodes. One disadvantage of
natural graphite is that graphite mines usually produce a
flake-graphite flotation concentrate, with a purity ranging
from 90-98%. To produce battery-grade graphite from this
concentrate, the graphite is purified to about 99.95% and the
graphite particle is rounded (spheroidized) - also known as
spherical graphite - to modify the particle shape and lower the
surface area. Generally, a larger surface means a shorter life
and lower energy density. Then the graphite is coated to
improve stability and extend the graphite's lifetime.
"At the moment, we think that synthetic graphite will
continue to hold the majority [market share], despite the lower
cost of natural spherical graphite" a spherical graphite
producer in Qingdao said.
"There is the possibility that natural graphite will expand
its market share because of its cost advantage, or the possible
development of a blend of the two graphite materials," an anode
material producer based in Qingdao said.
Optimization and diversification
In 2018, four Chinese companies were among the top
five global anode material producers. Shenzhen BTR New Energy
Materials, Shanshan Technology, Jiangxi Zichen Technology and
Dongguan Kaijin together accounted for an almost 66% share of
Manufacturers of anode materials that are bullish on the
future are vigorously integrating their production lines to
realize cost optimization or source diversification, especially
after China’s decrease in subsidies for new energy
vehicle (NEV) production in 2019.
In synthetic graphite production, raw materials and the
graphitization process account for 85% of the total cost, so to
optimize the cost structure, efforts will have to be made on
both aspects. In the graphitization process, electricity
accounts for about 33% of the cost. Therefore, building
facilities in regions with lower electricity costs, such as
Inner Mongolia, has become the practice for major synthetic
anode material producers.
"The average electricity price in Inner Mongolia is at 0.35
yuan per kilowatt hour (kWh), 64% and 43% lower when compared
with Japan and South Korea," a producer of synthetic graphite
in China said. "Suppose that the electricity consumption per
tonne of anode material produced is at 14,000 kWh, and with the
average price outside Inner Mongolia at 0.7 yuan per kWh, the
production cost would be 9,800 yuan per tonne. With a lower
energy price, it translates into a cost reduction of near
For natural graphite, there are efforts to diversify
material sources outside of China.
Australian graphite producer Syrah Resources said its first
production of purified spherical graphite from the Battery
Anode Material (BAM) plant in Louisiana, United States, had
been produced using natural graphite from the company's Balama
project in Mozambique in southeast Africa.
Nouveau Monde Graphite announced on February 26, 2020, that
it is producing spherical graphite on a demonstration basis
from its micronization and spheroidization facility in Canada,
prior to going into commercial production in mid-2022.