GRAPHITE MARKET ANALYSIS
The global graphite market is estimated to be valued at USD 17.74 billion in 2024 and is expected to reach USD 27.57 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.
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Factors such as increasing use of graphite in lithium-ion batteries due to rapid growth of electric vehicles and expansion of the renewable energy industry are driving the demand. Rising applications of graphite in refractories, lubricants, friction products, and other industrial applications has also contributed to the growth of the market. However, volatility in the prices of graphite might hamper the market growth during the forecast period.
Market Driver - Growth in steel industry
The global steel industry has been expanding rapidly over the past few years which has fueled the demand for graphite globally. Steel production requires graphite in the production process as well as for the coating of steel parts. Graphite is used as a refractory material and coating agent in steel plants. It has high thermal conductivity which allows uniform heat transfer during critical steps like smelting of iron ore and continuous casting of steel slabs. This ensures consistent quality and minimizes wastage from uneven heating.
Rising investment in infrastructure development across major developing economies has increased the consumption of steel significantly. Countries like China, India, Brazil, and various African nations have poured billions of dollars towards expanding roads, rail networks, power projects, ports etc. This infrastructure push demands huge amounts of steel for construction of bridges, high rises, manufacturing plants. According to the World Steel Association, global crude steel output witnessed a growth of over 5% in 2019 led by China whose steel production alone accounts for over 50% of total global supply.
While steel demand may fluctuate in short term due to economic cycles, the long-term outlook for the industry and correlated graphite consumption appears positive considering the developmental priorities of global emerging markets and governmental support for infrastructure led economic growth. Overall, the pace of steel industry expansion especially in developing parts of world bodes well for consistent requirement of graphite from this downstream market.
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Market Driver - Development of aluminum-graphite composites
Research on developing advanced composite materials has opened new applications for graphite in the aluminum and aerospace domains. Aluminum-graphite composites exhibit properties that surpass pure aluminum such as higher strength, stiffness, fatigue resistance, and thermal shock resistance. They also provide weight savings compared to steel and cast iron and are gaining utility in the transportation and defense segments.
In the automobile space, automobile manufacturers are increasingly utilizing aluminum-graphite composites to produce lightweight body panels, driveshafts, wheels, and suspension parts. The material allows significant weight reduction which, in turn, enhances fuel economy and performance metrics. Leading carmakers like BMW and Mercedes have ramped up their composite usage to meet rigorous emission standards. As aluminum becomes more widely used in powertrains and safety structures, this will augment demand for graphite-based composites from automotive OEMs and their assemblers.
Another major adopter is the aviation business where low weight is a top design prerequisite to achieve maximum fuel efficiency. Aluminum airframes along with composites that strengthen internal structures are indispensable for modern commercial and military aircrafts. Graphite's crack-resistant properties make it an suitable reinforce in plane wings, fuselages, and engine nacelles. Spacecrafts equally leverage the lightweight yet robust nature of graphite composites for their vehicles, missiles, and satellites.
Even general industrial sectors have leveraged the cost-benefit of aluminum-graphite composites. Piping, heat exchanger equipment, and valves in the oil & gas industry make extensive consumption. Renewable energy parts like wind turbine blades take advantage of the excellent corrosion resistance and conductivity.
Key Takeaways from Analyst:
The global graphite market remains highly fragmented with a stronghold of domestic players in China and India. The graphite demand is expected to be driven by increasing lithium-ion battery usage in electric vehicles and energy storage solutions in the coming years. Countries like the U.S., Germany, Japan, and South Korea are actively pushing electric mobility which will significantly boost the graphite anode demand for lithium-ion batteries. Rising adoption of grid-level energy storage for intermittent renewable sources is another growth driver.
However, supply response may remain constrained due to substantial time required for mine development activities. Environmental regulations around mining and processing are also quite stringent in major markets which can delay capacity additions. Availability of skilled labor for mining operations poses an additional challenge. The market might see temporary tightness if downstream demand rises sharply without a proportional increase in supply.
Synthetic graphite provides an alternative to balance supply-demand dynamics. However, its production also requires significant lead times for capacity build-up. Additionally, its costs are substantially higher than natural materials. The Asia Pacific region, especially China, is anticipated to continue dominating global graphite production and processing. Countries need to develop domestic mining and processing capabilities as well as graphitization plants to reduce reliance on imports from China.
Challenge: Volatility in raw material prices
The global graphite market faces significant challenges due to the volatility in raw material prices. Graphite is mined from the earth as a crude ore and requires complex refining and processing to produce the high-quality, purified graphite required by various end-use industries. The costs associated with mining, extracting, and purifying the graphite ore are subject to fluctuations depending on the global economic conditions, demand-supply forces, costs of energy and manpower, and other external factors. Any increase in costs has to be passed on to the customers, which affects the demand as the consumers may look for cheaper alternatives. Moreover, China dominates the global production and supply of graphite, accounting for over 70% of the supply. Supply disruptions or policies by the Chinese government can significantly impact the prices and availability of graphite in the international markets. The market players operating in this sector find it difficult to maintain stable profit margins due to the lack of control over raw material prices.
Opportunity: Emergence of graphene for market
The emergence of graphene as a new material presents significant opportunities for the growth of the global graphite market. Graphene is a two-dimensional carbon material derived from graphite with extraordinary properties that are driving its commercial applications across multiple industries including electronics, aerospace, construction, and healthcare. The demand for high-quality, purified graphite is increasing considerably to meet the requirements for producing graphene and related products on an industrial scale. Several companies are investing heavily in setting up production facilities dedicated to graphene and related products using graphite as the raw material. With increasing commercialization of graphene, it is projected that graphene applications would become a key growth driver contributing more than 15% of the total graphite market revenues in the coming years. This emerging application area can help counterbalance the challenges arising from raw material price volatility to some extent.
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Insights by product type: Wide range of industrial applications
In terms of product type, natural graphite is expected to contribute 58.6% share of the market in 2024. Natural graphite contributes the largest share of the global graphite market due to its diverse industrial uses. It benefits from being easily available in nature and having properties suitable for many applications.
One of the key drivers of natural graphite demand is its use in steel production. As the largest end-use sector, steel and metallurgy requires graphite as technical electrodes and refractory material. Natural graphite's high carbon content and heat resistance make it indispensable in steel-making processes like smelting and lactic oxygen furnaces.
Additionally, natural graphite powder finds wide utilization in the manufacture of brake linings, gaskets, and other sheet metal products. Its low friction characteristics help improve the functioning and lifespan of components in the automotive and aerospace industries. Many sealing and packing applications also leverage natural graphite's density and thermal stability.
The refractories segment is another major consumer of natural graphite. Used in furnace linings and insulation applications requiring high heat tolerance, natural graphite withstands operating temperatures up to 3100°C without degradation. This makes it well-suited for applications in glass, ceramics, cement, and other kiln and furnace systems.
Other end-uses capitalizing on natural graphite properties include lubricants, batteries, and flame retardants. Its hexagonal crystalline structure, purity, and conductivity promote greater electron mobility—a desirable attribute in the lithium-ion battery anode material.
Insights by application: Large-scale graphite consumption
Steel & metallurgy is expected to contribute 34.6% share of the market in 2024. The steel and metallurgy sector consumes more graphite than any other end-use industry globally. Steelmaking heavily relies on graphite additions at various processing stages to improve efficiency, yield, and alloy quality.
Graphite acts as a lubricating agent that helps control friction within blast furnaces and oxygen furnaces. It coats the interior surfaces and facilitates the smooth sliding of hot slags and metals. Graphite additions as lining materials in furnace walls also enhance heat resistance and service life.
During steel melting and ladle refining, graphite is used as a deoxidizing agent to control carbon and reduce impurities. As a neutral element, graphite captures oxygen and prevents unwanted oxidation within the melt. This improves metal purity and ensures consistent properties in the final products.
Graphite is a common alloying element that is added to achieve the desired carbon content in different grades of steel. Careful graphite dosage allows steelmakers to tune material properties like strength, hardness, and machinability as per customers' specifications.
Being the raw material for a wide variety of construction, machinery, and infrastructure projects, steel consumption globally remains substantial. Additionally, the positive macroeconomic conditions and growth in the automotive and manufacturing sector boost overall steel demand. Given its indispensable role, graphite uptake tracks steel production volumes very closely, thereby driving the steel and metallurgy segment.
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The North America region is the dominant player in the global graphite market. The region is expected to account for 35.6% of the market share in 2024. The region's large share can be attributed to the presence of well-established end-use industries, such as steelmaking, refractory, and automotive, coupled with increasing demand for graphite-based products. The U.S. is the major contributor to the North American graphite market, driven by the growing electric vehicle (EV) industry and rising investments in renewable energy projects that utilize graphite-based components. Additionally, the increased use of graphite in lithium-ion battery production for consumer electronics and energy storage systems has fueled the regional market growth.
The Asia Pacific region is the fastest growing market for graphite, driven by rapid industrialization and urbanization in countries like China, India, and Japan. China is the global leader in both natural and synthetic graphite production, accounting for over 70% of the world's graphite supply. The surging demand for graphite in the Asia Pacific region can be attributed to the expansion of the steel, refractory, and electronics industries, as well as the growing adoption of electric vehicles. India, in particular, has seen a significant increase in graphite consumption due to the government's push for renewable energy and the country's ambitious plans to transition to electric mobility.
Graphite Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 17.74 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 6.5% | 2031 Value Projection: | US$ 27.57 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Asbury Carbons, BTR New Material Group Co.,Ltd., Imerys, Eagle Graphite, Mason Graphite Inc, Nippon Kokuen Group, Northern Graphite Corp., SGL Carbon, EPM Group, Shenzhen Xiangfenghua Technology Co., Ltd., Showa Denko K.k., Syrah Resources Limited, Tokai Carbon Co. Ltd., Triton Minerals, Betterui New Materials Group Co. Ltd, GrafTech International Ltd., Linyi Yanjun Carbon Material Co., Ltd., Jilin Carbon New Material Co., Ltd., Hebei Hang Carbon, and Graphite India Limited |
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*Definition: The global graphite market refers to the worldwide industry for the mining, processing, and marketing of the element graphite. Natural flake graphite and synthetic graphite are the two primary types traded in this market. Key applications driving demand include refractories, lubricants, batteries, foundry products, and other industrial uses where graphite’s heat resistance and conductivity are advantageous. China, India, Brazil, and North America are some of the largest producing and consumer regions in the global graphite market.
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About Author
Yash Doshi is a Senior Management Consultant. He has 12+ years of experience in conducting research and handling consulting projects across verticals in APAC, EMEA, and the Americas.
He brings strong acumen in helping chemical companies navigate complex challenges and identify growth opportunities. He has deep expertise across the chemicals value chain, including commodity, specialty and fine chemicals, plastics and polymers, and petrochemicals. Yash is a sought-after speaker at industry conferences and contributes to various publications on topics related commodity, specialty and fine chemicals, plastics and polymers, and petrochemicals.
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