Graphite market imbalance will grow in the 2020s

Significance

Price rises were underpinned by higher-than-expected steel production, requiring additional graphite for the industrial process. Prices were also supported by fresh environmental inspections of Chinese production hubs in several provinces, when plants with excessive emissions were banned from applying for a 'pollutant discharge permit' for up to three years.

Impacts

• Given the size of its steel industry, China will continue to dominate the graphite market; it accounts for 55% of global demand.
• Graphite developers will benefit from investors’ interest in the battery sector.
• Talga’s Vittangi project in northern Sweden has been confirmed as the world's highest-grade graphite deposit.
• The unstable security situation in Mozambique raises questions about the near-term viability of graphite projects in the country.