Huge lift in battery graphite demand expected
Skyrocketing electric vehicle sales will boost battery-related graphite demand by a factor of 15 by the end of the decade, sparking a chronic shortage of fine grade material, Benchmark Mineral Intelligence (BMI) analyst George Miller said
11th December 2020
Resources Rising Stars
Skyrocketing electric vehicle sales will boost battery-related graphite demand by a factor of 15 by the end of the decade, sparking a chronic shortage of fine grade material, Benchmark Mineral Intelligence (BMI) analyst George Miller said (reports MiningNews).
Speaking at the first session of BMI's "Benchmark Week 2020" - a series of webinars spanning the breadth of the battery minerals supply chain, Miller said growth in demand for graphite from the battery sector would rise 30% per year on average out to 2030.
Graphite is a key component in an EV battery, with each vehicle containing between 40-60kg of the material.
At present, EVs account for 200,000 tonnes per year of graphite demand in a market of between 700-800,000tpa. However, BMI forecasts the EV figure will soar to nearly 3Mtpa in 2030 in a 4Mtpa market.
Although the medium-term supply outlook appears bleak, an expected price rise should trigger a supply side response from 2022, when Miller said projects currently under care and maintenance would likely resume production.
However, the battery sector's need for fine grade, sub-100 mesh material, means supply issues are likely to plague manufacturers throughout the decade.
"Whilst looking at all planned supply, if it reached market, would have the potential to balance out demand until 2027, incorporating restrictions on which natural graphite can be used for batteries shows a different picture," Miller said.
The near-term outlook is hardly promising either, with BMI forecasting a graphite supply deficit as soon as 2021, a situation Miller said was borne of low prices.
"Prices for both natural flake concentrate and value-added anode feedstock have been declining since the original growth of the EV market in 2017 and 2018 as a result of structural oversupply from Chinese deposits," said Miller.
"This has contributed to projects in Africa being put on care and maintenance, and has ultimately meant pricing has yet to reach incentive prices for projects outside of China, to encourage these projects and other jurisdictions to come to market," the analyst added.
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