General Discussions, page-30106

Do you think ex-China production of synthetic graphite alone will be sufficient supply to meet demand for EV batteries?

Remember China has a monopoly on PSG. Even if you ignore the benefits of natural graphite (price, ESG, capacity), this is about diversifying anode supplies away from China.

“Both natural and synthetic forms of graphite can be used to make the anode material. Although the two feedstocks produce broadly similar materials, natural graphite anodes offer higher capacities whereas synthetic graphite anodes typically boast longer cycle lifes.

As anode producers seek to maximise these different properties, batteries increasingly contain a blend of both synthetic and natural graphite in their anode materials, though the proportions vary by producer, and ultimately the requirements of the application.” (Benchmark Source)

The proportion of natural graphite also depends on price and supply.

“But when the prices for natural anode materials are at enough of a discount against the synthetic ones, downstream manufacturers will show more willingness to expand the ratio of the former in battery manufacturing, according to market sources.

In 2021, a power crunch in China, the major production hub for synthetic anode globally, resulted in a supply shortage of synthetic anode. Surging prices drove market participants to increase the share of natural graphite anode in their battery production.

Original equipment manufacturers (OEMs) in Europe and the US will be looking to secure supply of materials with favorable ESG credentials, and at prices enabling them to be cost-competitive with Chinese producers. So the lower carbon footprint associated with natural graphite, combined with the lower prices for natural active anode material, could result in growing demand for natural materials over synthetic.” (Fastmarkets)

We are beginning to see evidence of this from battery manufacturers.

“Electric vehicle (EV) battery makers and original equipment manufacturers (OEMs) are willing to pay a premium for Inflation Reduction Act-compliant material.

‘Battery manufacturers and OEMs are sincere about wanting to have a supply chain that is environmentally responsible.’” (Fastmarkets)

https://source.benchmarkminerals.com/article/infographic-china-controls-three-quarters-of-graphite-anode-supply-chain

https://www.fastmarkets.com/insights/synthetic-versus-natural-graphite-debate/

https://www.fastmarkets.com/insights/graphite-buyers-pay-ira-premium/