A comprehensive market guide to natural and synthetic graphite

A comprehensive market guide to natural and synthetic graphite
Market summary
Graphite is one of the five main natural forms of carbon along with coke, coal, anthracite and diamond.

Graphite can also be manufactured synthetically, primarily via the Acheson Process, which uses lower purity carbon-bearing raw materials blended with tar pitch.

Graphite is used in a range of industrial applications including refractories, foundries, lubricants and batteries. It is the largest ingredient in the anode of lithium-ion batteries used in electric vehicles and is usually a mixture of natural and synthetic material.

The natural graphite market is around 1.1 million tpy, of which around 40% is flake graphite and 60% is amorphous (microcrystalline) material.

Annual production of vein graphite is less than 5,000 tpy.

According to the China Graphite Industry Association, global graphite mining capacity in 2019 grew to 1.8 million tonnes from 1.3 million tonnes in 2018, with the majority of the increase coming from outside China.

Total global supply of synthetic graphite is estimated to be around 1.5 million tpy.
What’s happening in the graphite market?

The EU’s Critical Raw Materials Act (CRMA) and supply chain localization were hot topics of discussion for presenters at the Alkeemia Battery Forum, which runs April 10-12 in Venice, Italy

Oversupply and increased competition from lower-priced synthetic graphite are likely to continue to put downward pressure on natural flake graphite prices over the next few years, sources in Shanghai told Fastmarkets.

China’s graphite exports continued to fall in the first two months of 2024 after the implementation of the export controls on certain graphite-related products on December 1, 2023


Production hubs

The leading global producer of natural graphite is China, which produced around 700,000 tonnes in 2019.

The second largest producer is Mozambique, which in the last few years has increased production to over 100,000 tpy, slightly more than the third largest producer, Brazil, which mined 96,000 tonnes in 2019.

Madagascar, Canada and India each produce between 30-50,000 tpy annually, while around 15 other countries around the world produce smaller quantities.

Global graphite production 2010-2020

YearGraphite production (tonnes)
2020Est 1.1m
Source: USGS

CountryGraphite production 2019 (tonnes)
Source: USGS

China’s graphite production by region

Around 70% of Chinese natural graphite production is amorphous and the remaining 30% is flake.

There are estimated to be around 28 small to medium-sized mining operations in Heilongjiang province producing mostly fines from the Jixi/Mashan and Luobei regions.

Around 22 mines operate in Inner Mongolia, also producing fines and small fakes.

Around 16 mines operate in Shandong province, producing mostly coarse flake from the Pingdu region (processed in Qingdao) in northeast China.

Smaller amounts are produced in other provinces, including Guangdong.

China does produce some large flake graphite, but the majority of its flake graphite production is very small, in the +200-mesh range.
Main trade flows
Historically, the majority of the world’s graphite was produced in Europe and North America.

China entered the graphite supply market in the early 1990s, and quickly outcompeted northern hemisphere producers, causing most mines outside China to close.

This shift also supported the establishment of graphite processing hubs in China, Japan and South Korea. Japan, South Korea, the EU and the US are all significant importers of graphite, both in concentrate form from China and processed form from Japan and South Korea.

While China continues to be the world’s leading producer and exporter of graphite (exporting 114,330 tonnes of flake material in 2019), in the last three years, the country has become a significant importer, particularly of large flake material.

Chinese demand for expandable graphite (which requires +32 mesh flake) is approximately 70,000 tpy. China only produces around 25,000 tpy of +50 mesh flake, with the rest consisting of +80 mesh flake.

China’s imports of flake graphite doubled year on year in 2019 to 193,007 tonnes, with much of this material coming from Mozambique and Madagascar.

By contrast, the US imported 58,000 tonnes in 2019 from a range of sources, including China, Mexico and India. Exports to Europe from China were 18,687 tonnes in 2019, down 43% on the previous year.

Graphite production by grade

There are three main types of natural graphite: flake (>85% carbon), amorphous (typically 60-85% carbon) and vein (>90% carbon).

Within the flake category, there are three main grades: large (+80 mesh), medium (+100-80 mesh) and fine (-100 mesh). More recently, some non-Chinese producers have started to market what they refer to as “jumbo” flake graphite (+50 mesh).

Spherical graphite (99.9% C) is manufactured from fine flake graphite.

Largest natural graphite-producing companies

China Minmetals (China)
Heilongjiang Aoyu Energy (China)
Hubei Hengda Graphite Shareholding (China)
Inner Mongolia Rising Energy Group Ltd (China)
Qingdao Black Dragon Graphite Group (China)
Qingdao Haida Graphite (China)
South Graphite (China)
Xincheng Graphite Co. Ltd (China)
Extrativa Metalquimica (Brazil)
Nacional de Grafite (Brazil)
Tirupati Carbon & Graphite (India)
Syrah Resources (Mozambique)

Largest synthetic graphite-producing companies

GrafTech International (US)
Showa Denko (Japan)
SGL Group (Germany)
Graphite India (India)
HEG (India)
Tokai Carbon (Japan)
Nippon Carbon (Japan)
SEC Carbon (Japan)
Kaifeng Carbon (China)
Nantong Yangzi Carbon (China)
Natural graphite consumption is around 1 million tpy and in 2019, supply outpaced demand.

Around 40% of global graphite supply is consumed in refractories production; 35% goes into multiple smaller markets including thermal management in electronics, brake and clutch parts, gaskets, fire retardants and carbon brushes.

The biggest refractory companies include RHI-Magnesita (Austria-Brazil); Vesuvius (UK); Imerys (France); Krosaki-Harima and Shinagawa (both Japan).

Lithium-ion battery anodes currently account for between 25% and 30% of natural graphite demand but this is growing steadily by a few per cent every year.

Synthetic graphite is by far the leading material for batteries in general, but for lithium-ion batteries anodes, it is roughly a 50:50 share between natural and synthetic.

The biggest lithium-ion battery manufacturers include BYD (China); Panasonic (Japan); Foxconn (Taiwan); and LG Chem (South Korea).

Graphite transactions in the marketplace are largely based on direct negotiations between buyers and sellers (mining companies), with some spot market activity in China but virtually all other material is sold through contracts of up to a year. Most Chinese material is sold on FOB basis.

Synthetic graphite for battery anodes is mainly traded on a spot basis within China or on contracts in Japan.

Chinese exports of anode material and ex-China transactions for other kinds of synthetic graphite are typically priced on 3, 6 or 12 month contracts.

Sources: USGS, China Graphite Industry Association, Industrial Minerals archives, industry sources
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