Graphite demand this year

Apart from the graphite mining companies themselves, one of the key protagonists for 2014 was Tesla Motors. The Californian manufacturer of electric cars shocked the market last February, when it announced that it would build a ‘giga-factory’ to produce lithium-ion batteries with a planned investment of USD$ 5 billion. This was perhaps the single most important graphite news of the decade, given that Tesla’s battery needs will greatly increase demand for natural graphite. Tesla has announced that the Gigafactory would be built in Nevada and that the project would be ready a year ahead of schedule, which will put pressure on graphite miners to reach production stage in 2015 or shortly thereafter: the race is on. Others followed Tesla’s tracks, announcing their own battery production projects, including LG Chem and Foxconn Technology. Both will build their factories in China – just as the availability of Chinese graphite could start to decline due to increasing mining restrictions. Indeed, in 2015, both graphite market leaders and ‘followers’ will have cause to celebrate because there are growing concerns that current Chinese graphite supply is unable to meet demand in the near future.
At the end of 2013, China was forced to shut down production of graphite in Pingdu for environmental reasons. And then there is the issue of purity. Therefore, if 2014 was not a champagne popping year for graphite prices, expectations for 2015 are very optimistic because, even if the refractory market (used in steel production) could continue to be slow, the battery market could grow in a much more sustained manner.
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