“Refractories remain the most important end use of [natural graphite] in terms of volume, accounting for around 33% of total global demand. The main driver for growth in demand has been increasing steel production in Asia, particularly China. Future expansion in this sector is unlikely to track recovering steel output as unit consumption of refractory material per tonne of steel is falling in both China and the CIS as new steel mills are installed.” This is the outlook from metals and mineral research company, Roskill, in it’s Economics of Natural Graphite (7th Edition 2009) report.
On pricing, the report states: “After decades in which the average value of exports of Chinese natural graphite showed a slow but steady decline, prices increased in 2007, following the introduction of an export tax and rising energy and transport costs. This upward trend continued in 2008 and while prices fell back slightly in response to recessionary conditions in 2009, they are expected to recover to an average of $840/t by 2010. In the medium term, rising production costs, including the cost of complying with environmental controls, will exert an upward pressure on prices.”
It continues: “The use of natural graphite in batteries has increased, partly as a result of increased availability of high-purity, high-carbon grades, and partly because of increased output of lithium-ion batteries, which use graphite in the anode. Graphite is used in a number of fuel cells under development; the greatest potential for a significant increase in consumption lies with the proton exchange membrane cell for use in automotive and stationary power sources.”
According to Roskill, China is the largest producer and consumer of this metal: “In 2008, [China] accounted for around 80% of supply, although the rate at which mine production has grown has slowed to 1.6%/y since 2001. In contrast, output in Brazil, Sri Lanka and North Korea has increased at higher rates ranging from 3.5%/y to over 6%/y. Increasing demand for flake graphite has led to a number of potential developments outside China that could add a total of 70,000 t/y to global supply.
“Chinese production is still characterised by a large number of small companies but larger producers are emerging in both Heilongjiang and Hunan. There are now seven Chinese companies capable of producing more than 30,000 t/y of natural graphite. Increasing regulation of mine safety and plant emissions, together with the imposition of export taxes and permits is likely to lead to further consolidation. Existing and anticipated restrictions in the availability of Chinese graphite in the world market have encouraged foreign producers and processors to invest in production bases in the country.”
And it seems China’s consumption will only get bigger, “consumption is forecast to increase by 8%/y from 2010. Much of this will be linked to a recovery in steel output, but increasing availability of high-purity grades will feed into China’s fast growing battery industry. Consumption of graphite in reactor components and nuclear control rods will increase as new reactors are brought online.”
With the development of thermal and chemical processes to produce high-purity natural graphite, more effective use of graphite resources has proceeded. Lower grade ores and fines can be transformed into grades suitable for use in demanding applications such as batteries. This has led to a greater uptake of natural graphite in uses such as batteries and carbon parts.
For more information on the report visit www.roskill.com/reports/natural