Graphite Electrode

Graphite Electrode

Explore the dynamics of the graphite electrode market and the factors influencing it, including rising feedstock costs, production challenges, and shifts toward natural graphite in battery manufacturing.

Multiple Factors Leading to Graphite Electrode Price Surge

Fastmarkets' latest price assessment for graphite electrodes, ultra-high power, fob China, was pegged at $4,250-4,560 per tonne as of March 30. This represents a substantial increase of $620-790 (19.05%) since the market was first evaluated at $3,460-3,940 per tonne on January 19, 2022.

Similarly, the price for high power graphite electrodes, fob China, climbed to $3,600-3,780 per tonne on March 30. This marks an increase of $610-630 (20.20%) from $2,990-3,150 per tonne in January.

Driving Factors for Price Increases

The cost of graphite electrodes, crucially used in steelmaking, has been driven upward by spikes in feedstock prices. Notably, the cost of needle coke and petroleum coke sees a continuous rise since the beginning of the year. China, being the leading producer of synthetic graphite, has seen coke prices escalate month-on-month by 23.53% and 11.57%, now standing around 8,000-13,000 yuan ($1,243-2,019) and 6,000-7,500 yuan per tonne respectively.

Europe has also been affected by the European Commission's anti-dumping duties on Chinese graphite electrodes, further pushing up prices for end consumers in the region.

Impact on Synthetic Graphite for Anodes

Both graphite electrodes and synthetic graphite for lithium-ion battery anodes are feeling the inflationary squeeze in feedstock costs. With added pressure from evolving anode markets in China, competition for graphitization facilities is heightening, tightening availability.

One battery producer mentioned, "Graphitization capacity might ease compared to the latter half of last year when China's power crunch was severe, yet there remains prevalent tightness in supply chain availability."

Additionally, Covid-19-related restrictions have impacted production cycles, leading to transport disruptions in northern parts of China. A second anode producer remarked, "Concerns about raw material availability persist amid China's ongoing Covid-19 outbreak."

Shifting to Natural Graphite

Rising costs in synthetic graphite are steering battery manufacturers toward natural graphite. According to sources, raw material and graphitization expenses make up roughly 85% of the production cost of graphite anode material, making natural graphite, which costs about half as much as synthetic, more attractive.

Synthetic graphite is favored for its consistency and high purity, making it ideal for applications that require longevity and fast charging. Despite this, the natural alternative is gaining traction owing to its lower price and notable performance.

Fastmarkets' research highlights that while spherical graphite production is predominantly controlled by China, new participants from South Korea, Japan, and Europe are shifting preference toward natural graphite.

In Europe, Talga's recent commissioning of the first lithium-ion battery anode plant exemplifies this shift. Natural graphite, aside from being cost-effective, is less energy-intensive in production compared to synthetic graphite, thereby offering a more eco-friendly option for electric vehicle manufacturers.

Prices for spherical natural graphite have surged, driven by increased demand and limited supply. Fastmarkets assessed spherical graphite (99.95% C, 15 microns, fob China) at $3,500-3,800 per tonne on March 31, reflecting a 44.55% rise from $2,300-2,750 per tonne on April 1, 2021.

Nonetheless, supply-chain issues such as stringent anti-pollution controls in China's Luobei county and global logistics challenges continue to affect production. Natural graphite holds a strong cost advantage despite increased feedstock costs.

For example, fine graphite flake prices swelled due to tightened supply from China and Africa, alongside rising demand. Fastmarkets put the price for graphite flake (94% C, -100 mesh, fob China) at $830 per tonne on March 31, up 52.29% from $545 per tonne on April 1, 2021.

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