Graphite may have been lumped in the so-called “battery metals” basket, but it’s the varied uses in other applications that has experts predicting demand for the commodity will soar.
In this guide, * explains the factors that have been driving ASX graphite stocks, and what will spur demand — and stock prices — into the future.
Graphite is a naturally-occurring form of crystalline carbon. It is a mineral with extreme properties and many uses.
Traditionally, the graphite industry’s bread and butter has been its use in refractory (or “heat-resistant” bricks, which line the inside of blast furnaces to protect them from the heat generated in steelmaking. How did graphite come about?
Graphite was first used in the 4th millennium BC in ceramic paint for decorating pottery.
In the 1500s, the commodity was found to be useful for marking sheep after local farmers found a massive deposit of graphite in England.
This led to the creation of the world’s first modern pencil by French inventor Nicholas Jacques Conté. He was responsible for creating the different hardness of pencils by mixing powdered graphite with clay into rods and firing them in a kiln.
Numerous other uses for graphite were discovered around the same time, including as a refractory material to line moulds for cannonballs.
This produced rounder and smoother balls that could be fired further, greatly benefiting the English Navy. What is driving demand?
Today demand for graphite is primarily driven by the steel market, but the rapid rate of growth in the lithium-ion battery industry is driving demand for both natural flake graphite and synthetic graphite.
Each lithium-ion battery requires 60kg of graphite – more than twice the amount of lithium needed.
Market forecaster Roskill predicts graphite demand from battery makers will grow by 23-27 per cent each year through to 2028.
But major battery makers such as BYD and Panasonic have very specific quality requirements for their batteries, and industry watchers see that market as hard to break into, given China is the main producer of spherical graphite.
Spherical graphite, processed from natural or fine flake graphite, is used in the anodes of lithium-ion batteries.
Meanwhile, graphite’s unique ability to withstand extreme heat and prevent fire from spreading is opening up many new market opportunities — with demand growing much more quickly than expected. A great fire retardant
When treated with acid and heat, graphite flakes split apart and increase in volume by up to 300 times.
This “expandable graphite” can be pressed into sheets and used for heat and fire protection in applications ranging from building materials to consumer electronics and fuel cells.
Fire safety is rapidly becoming a global issue in commercial and residential construction, driven by disasters such as the London Grenfell Tower tragedy and an explosion at China’s Tianjin Port in December 2015.
The cladding on the Grenfell Tower is believed to have contributed to the rapid spread of the fire that killed 71 people and gutted the 24-storey building in west London.
Similar fires have occurred in Australia and the United Arab Emirates.
New legislation in China, the European Union, Japan and Korea has either required flame retardants in building codes and/or banned brominated and asbestos-based flame retardants.
Australia is also placing restrictions on the use of non-flame retardant materials in aluminium cladding on buildings.
Annually, China needs 40 million tonnes of flame-retardant building materials that will contain 5 per cent expandable graphite.
That’s 2 million tonnes of expandable graphite required each year just by China’s construction industry.
“To put this level of graphite demand in perspective, it is more than 10 times greater than existing natural graphite demand from the lithium-ion battery industry,” says Graphex Mining (ASX:GPX) managing director Phil Hoskins.
“Most commodity analysts aren’t predicting battery graphite demand to reach this level until 2025-2030.”
Lucrative graphene market
Graphite can also be turned into graphene — an atom thin sheet of carbon, noted for its incredible strength and conductivity.
Two professors at the University of Manchester discovered the material in 2004 during a “Friday night experiment” session when they used sticky tape to separate graphite fragments and created graphene flakes one atom thick.
They were later awarded the 2010 Nobel Prize in physics.
Graphene is 1 million times smaller than the diameter of a single hair, yet it is 200 times stronger than steel and still lightweight and flexible.
The material is now used in electronics, sensors, aircraft, green tech solutions, industrial robotics and sporting equipment – possibly even wallpaper that can generate electricity.
Researchers at the University of Massachusetts have also proven that graphene has eight to 10 times the stopping power of steel and is twice as effective as Kevlar at stopping bullets.
Because graphene is extremely lightweight, researchers are now looking into creating fabrics from woven carbon nanotubes (essentially a tube of graphene) for military grade and high-performance combat and sports clothing.
Chinese researchers have even found a use for graphene in protecting ancient wall paintings.
The graphene industry rocketed from $US85m in 2017 to $US200m in 2018 — marking a 135 per cent increase.
Market researchers predict it will surpass $US1 billion by 2023 thanks to its many uses.
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bricks, which line the inside of blast furnaces to protect them from the heat generated in steelmaking.
