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.
Graphite Market Report Snapshots
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