June 2024 Updates: Graphite Prices Rise Amidst Demand Growth

In June 2024, graphite miners saw slight increases in flake graphite prices, particularly in the 99.95% purity used for Li-ion batteries. Macquarie Research predicts a supply deficit starting in 2025, with demand for graphite in clean energy technologies projected to grow significantly by 2040. To meet this demand, the IEA and BMI forecast the need for new graphite mines and refineries. The IEA's 2024 report discusses the critical role of graphite in clean energy, while budget allocations in May aim to support critical minerals refiners.

The graphite market experienced a downturn in 2023, with flake graphite prices taking a hit due to reduced demand from China's EV sector and steel industry [1]. However, a recent report by Macquarie Research predicts a supply deficit in the graphite market starting from 2025 [2]. This deficit is attributed to the growing demand for graphite in clean energy technologies, particularly lithium-ion batteries.

Despite the challenges faced in 2023, the graphite market is expected to recover in 2024. UBS forecasts a 50% price surge from the 2023 lows, with a long-term flake graphite price of $850/t [1]. The International Energy Agency (IEA) and Business Monitor International (BMI) also anticipate the need for new graphite mines and refineries to meet the growing demand [2].

The critical role of graphite in clean energy technologies was highlighted in the IEA's 2024 report [3]. Furthermore, budget allocations in May aimed to support critical minerals refiners, underscoring the importance of ensuring a stable supply of these essential materials [3].

While the European Union added synthetic graphite to its list of critical materials in late 2023 [1], China, which controls 75% of the global graphite anode supply chain, continues to dominate the market. The recent introduction of temporary export permits for some graphite products has resulted in price increases and uncertainty around supply outside of China [1].

In conclusion, the graphite market is poised for a significant surge in demand driven by the clean energy sector. Despite the challenges faced in 2023, analysts expect a balanced market in 2024 with the possibility of price recovery. The need for new mines and refineries, as well as support for critical minerals refiners, underscores the importance of ensuring a stable supply of graphite to meet the demands of the clean energy transition.

[1] InvestorNews. (2023, December 1). An Update on the Graphite Sector and What to Expect in 2024 and Beyond. https://investornews.com/critical-minerals-rare-earths/an-update-on-the-graphite-sector-and-what-to-expect-in-2024-and-beyond/
[2] Macquarie Research. (2023, June 6). Graphite Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2022-2029. https://www.grandviewresearch.com/industry-analysis/graphite-market
[3] International Energy Agency. (2024). The Role of Graphite in Clean Energy Technologies. https://www.iea.org/reports/the-role-of-graphite-in-clean-energy-technologies