Roskill's view on trends in battery metals markets - extract of graphite view....
Graphite is widely consumed in batteries, but they account for <1% of overall graphite demand meaning the market is not dictated by batteries. An estimated 136,000t of graphite is expected to be used in batteries in 2016, with Li-ion battery anodes accounting for around 80% of consumption. Li-ion batteries are one of the only sectors where there is real competition between natural and synthetic graphite. Around 27,000t of synthetic graphite could be manufactured specifically for use in lithium-ion batteries in 2016 with high-purity, high-carbon grade and few impurities that could impede battery performance. A further 86,000t of natural graphite could be used to produce spherical graphite for this application; natural graphite must be highly purified and shaped in order to compete with synthetic in terms of purity, grade and consistency. Spherical processing has very low yields; around half of all graphite is lost as waste, limiting raw material use to fine and medium size flake. The price of spherical graphite (when finished with expensive coatings) approaches that of high-value synthetic. Even before coating, spherical graphite is more than five times the average price of the raw material flake graphite.
China dominates manufacture of Li-ion battery anodes and is the largest supplier of both natural and synthetic graphite. Currently, all spherical graphite processing is limited to China because of the use of strong reagents and the cost of meeting environmental restrictions outside China. A number of natural graphite projects are committed to developing a spherical graphite supply chain outside China, possibly using alternative processing methods. Meanwhile, poorly performing steel markets may continue to drive down the price of synthetic graphite and encourage synthetic graphite manufacturers to focus on the battery industry as they diversify away from the main market of steel-making electrodes. Roskill believes that growing Li-ion battery demand will provide room for increased consumption of both natural and synthetic graphite but that synthetic may increase its market share as it has the potential to be more flexible to requirements.
