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Natural graphite is mined, Jacobs explained, and requires four times less electricity to produce, making it a greener alternative. Because less energy is needed, prices for natural graphite have historically been “somewhere between 50-100% cheaper than artificial graphite,” Jacobs said.
Meanwhile, synthetic graphite is manufactured using petroleum coke, a refined product produced using crude oil. The particles are “more structured,” creating a more uniform output.
“[Synthetic graphite] tends to cycle better when you’re charging and discharging a battery,” Jacobs said.
Typically, batteries are made with a blend of both materials, according to Jacobs.
“By mixing natural graphite with artificial graphite…you can get some of the benefits of both worlds,” he explained.
The cathode type in the battery determines the ratio of natural graphite versus synthetic graphite, Jacobs said. A nickel cobalt manganese (NCM) cathode, which is used in longer-range premium electric vehicles (EVs), tends to use a blend of 50% natural and 50% synthetic graphite.
Lithium iron phosphate (LFP) cathodes, which are lower energy but cycle longer compared with NCM cathodes, typically use a 70% synthetic and 30% natural graphite blend.
More synthetic graphite was typically used in LFP cathodes, but recent advancements in natural graphite production has created a more consistent and porous graphite, allowing natural graphite to operate similarly to synthetic material.
Because of improvements in natural graphite, more battery manufacturers are leaning toward using a higher ratio of natural material.
“I don’t know that [LFP cathodes will] ever completely eliminate artificial graphite,” Jacobs said, “but I do expect that blend ratio to start to move in the same direction as the NCM cathode.”
While historically natural graphite prices have been much cheaper than synthetic graphite, overcapacity in China has brought prices to parity with natural graphite.
“Right now, those prices are roughly the same,” Jacobs stated. “That’s all because of this oversupply situation in China.”
The current pricing dynamics are unsustainable, according to Jacobs, because “you cannot produce something with four times as much electricity and still offer it at the same price as the other thing.”
“These [Chinese] companies can’t continue to sell the graphite at their current prices, they’re going to go out of business,” Jacobs added. “So as these Chinese companies disappear — and they will — the price…difference between the materials return.”
When the pricing spread returns and natural graphite performance continues to improve, the market will move away from synthetic graphite, Jacobs said.
Additionally, Chinese overcapacity has caused concern for producers outside of China, but new US-based capacity coming online will reduce the global dependency on Chinese graphite, Jacobs explained.
Westwater’s graphite mine in Coosa County, Alabama, is planned to begin production in 2029. The company’s processing facility in Kellyton, Alabama, is slated to come online ahead of the mine’s start.
By sourcing from domestic graphite producers, buyers will “eliminate risk,” Jacobs said, because the ever-changing tariff policies surrounding graphite have created price uncertainty for Chinese material.
“The fear that tariffs are here today, gone tomorrow, back again today — like there’s always some fear,” Jacobs explained. “[The] indisputable argument is that buying from a US company is just less risky.”
“Companies cannot create a long-term battery strategy every year [based] on tariffs,” Jacobs added. “The easiest way to just basically never worry about tariffs again is to buy US materials.”
Imported graphite is currently subject to 25% Section 301 tariffs.
And as demand rises for batteries in the US because of the AI boom and growth of EV demand, manufacturers will turn toward natural US graphite, according to Jacobs.
Fastmarkets most recently assessed graphite flake, 94%, -100 mesh, cif US ports at $770-820 per tonne on June 4, steady from May 7 but up by $20 per tonne from $750-800 per tonne on April 2.
(The first paragraph had erroneously stated Jon Jacobs was the chief operating officer of Westwater Resources when the report was first published. This has been corrected to chief commercial officer.)
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