Graphite Market Faces Challenges Amid 2024 Price Pressures

Graphite market struggles as price pressures mount. A mild recovery is anticipated in 2025 but reliance on China and geopolitical issues pose risks.

Date: 22-01-2025

AI Rating: 5

Market Overview: The report outlines the ongoing challenges within the graphite market, particularly highlighting price pressures and a shift in demand dynamics. Major concerns include reliance on Chinese supply and geopolitical tensions affecting export controls.

Supply Challenges: The report discusses the significant growth in natural graphite production that reached 1,680,000 metric tons in 2022 but notes a decline in 2023 to 1,600,000 metric tons, contributing to a market deficit driven by rising battery demand. Meanwhile, synthetic graphite is experiencing an oversupply of 350,000 metric tons.

Long-Term Outlook: While a recovery is expected in 2025, the need for additional graphite supply remains critical due to predicted EV demand growth of 400 percent over the next decade. The document projects significant market deficits reaching over 600,000 metric tons by 2040 if current production levels are maintained.

Geopolitical Risks: China’s control over 76 percent of natural graphite production introduces vulnerabilities, particularly as regulatory changes could disrupt supply chains. The Inflation Reduction Act poses additional pressure by necessitating a shift towards non-Chinese sources.

Company Implications: North American companies are working to address these supply chain challenges through government partnerships and investments. However, a forecasted market deficit of 200,000 metric tons in 2024 suggests further investment in capacity will be essential.

Potential Impact on Stock Prices: Companies reliant on graphite supply chains could be affected by fluctuations in raw material availability due to geopolitical tensions, leading to potential stock price volatility.

Stocks: STS GPH NGC