What is Graphite?
Graphite is a low density allotrope of the element carbon. This naturally occurring element is soft to touch and comes in black color. In its innate form it is used as a dry lubricant. The electric conductivity of graphite makes it a popular choice for electrodes. When this element is mixed with clay it goes onto form the compound called 'lead', which is used in pencils. Graphite is also known as black lead.
Natural graphite comes in several forms: flake, amorphous and lump. Graphite has many important new applications including its use in lithium ion batteries, fuel cells and nuclear and solar power that have the potential to significantly increase the demand for this critical element. For instance, there is between 10 and 30 times more graphite required by weight to produce a lithium-ion battery than there is lithium. In addition, the recent discovery of a new material called graphene, which is actually derived from graphite, has also heightened interest. International research is now underway into a number of its potential applications including enhancing the speed and processing power of many modern electronic devices. This has also increased the interest in graphite.
Meanwhile, global consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MM t in 2012. Demand for graphite has been increasing by approximately 5% per year since 2000 due to the ongoing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Of the 1.2 million tons of graphite produced annually, approximately 40% is of the most desirable flake type. China, which produces about 73% of the world's graphite, is seeing production and export growth leveling and export taxes and a licensing system have been instituted. A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the EU, July 2010). As a function of these fundamentals, demand for graphite and thereby prices are expected to rise as electric vehicles and lithium battery technology continue to be adopted and while the material performs a greater role in new technology applications. Graphite prices have been increasing in recent months and over the last couple of years and prices for large flake, high purity graphite (+80 mesh, 0.2mm, 94-97% Carbon) have more than doubled.
The "blue sky" for the graphite industry is the incremental demand that will be created by a number of green initiatives including Li ion batteries, fuel cells, solar energy, semi conductors, and nuclear energy. Many of these applications have the potential to consume more graphite that all current uses combined.
The market for graphite exceeds one million tonnes per year ("Mtpy") of which 60% is amorphous and 40% flake. Only flake graphite which can be upgraded to 99.9% purity is suitable for making Li ion batteries. The graphite market is almost as large as the nickel market (1.3 Mtpy), far larger than the markets for magnesium (429 Mtpy), molybdenum (180 Mtpy) or tungsten (55 Mtpy), and more than 50 times the size of the lithium or rare earth markets.
Specific Graphite Uses
Pebble Bed Nuclear Reactor
- No meltdown by design
- Lower capital and operating costs
- More efficient with the use of heat and fuel
- A 1GW Pebble Bed Reactor needs 3,000 tonnes of graphite to start up and up to 1,000 tonnes to operate annually
- Smaller, lighter and more powerful than traditional batteries
- Li-Ion battery demand for graphite in the next 5 to 7 years will consume more graphite than is produced in total today
- Used in all types of electric vehicles with 10 - 20x more graphite than lithium used
- Only flake graphite is conducive to making Li-Ion batteries
- 80kg of graphite is used in the average fuel cell vehicle
- Fortune 500 companies are targeting fuel cell markets for non-transportation uses
Graphite Supply & Demand
- Graphite demand has been pinned as an approximately $12 Billion market (USD)
- Supply for graphite is generally grouped into two categories:
- 40% of graphite supply is in flake-form
- 60% of graphite supply is in amorphous-form
- Global consumption of natural graphite has increased from ~600,000 tons in 2000 to 1.1 M tons in 2011
- Global graphite reserves are thought to be around 71 million tons
- Flake graphite production is approximately 400,000 tons per year
- Demand from BRIC (Brazil, Russia, India, China) and emerging economies has been growing at about 5% per annum between 2000 - 2010, contributing to the rising price of graphite today
- China produces over 70% of the world's graphite or about 800,000 tons per year
- Mainly low-carbon, low-value powder or small flake
- Declining production/exports and increasing costs
- Emphasis on value-added processing
- Export taxes, VAT, and export licenses imposed
"As battery manufacturers grow with the burgeoning automotive lithium battery industry, these manufacturers will need a stable supply of raw materials. Increasingly, they are looking for graphite outside of China. Today, there is annual demand for roughly 1.1 million tonnes of natural graphite ... but 960,000 tonnes of that capacity comes from China. This leaves customers largely dependent on China as a source of supply." - Byron Capital Markets, 2012
- Prices have almost tripled since 2005 due to:
- Industrialization of BRIC (Brazil, Russia, India, China)
- Strong demand from traditional steel and automotive markets
- Increasing demand as China's production and exports decline
- Graphite price appreciation is largely a function of the commodity super cycle and the industrialization of emerging economies as new, high growth applications are beginning to have an impact on demand and consumption
- Graphite prices are also a function of flake size and purity with large flake (+80 mesh), 94% carbon varieties commanding premium pricing.
2012 Industrial Minerals Graphite Prices per Tonne FCL CIF main European port
|99% to 99.9% C, +50 mesh||$4,500||$6,000|
|94% to 97% C, +80 mesh CIF||$2,500||$3,000|
|90% C, +80 mesh||$2,000||$2,500|
|94% to 97% C, +100-80 mesh||$2,200||$2,500|
|90% C, +100-80 mesh||$1,500||$2,000|
|85% to 87% C, +100-80 mesh||$1,500||$1,900|
|94% to 97% C, -100 mesh||$2,000||$2,400|
|90% C, -100 mesh||$1,400||$1,800|
|Amorphous powder 80% to 85C||$600||$800|
|Synthetic 99.95% C2||$7,000||$20,000|
What is Graphene?
Graphene is also an allotrope of carbon; it is the thinnest material ever, yet it is strong enough to hold the weight of an elephant even. Graphene is so thin at the molecular level that around about a stack of its 7 million sheets will only turn out to be a millimeter in thickness. Graphene occurs naturally in graphite, and it has unique physical properties.
Uses of Graphene:
- Graphene is a new wonder material, as much as 200 times stronger than steel and a super conductor.
- The applications of graphene are just starting to be uncovered really, and new capital is being deployed to support such research.
- One such projected application is in high speed, quantum computers.
Where Are Graphite And Graphene Found?
Both graphene and graphite are found naturally and are also synthetically manufactured. Graphite is mined using underground mining and surface quarrying in countries like China, Brazil, Canada, Madagascar, Norway, Ukraine, and Zimbabwe, where it is found in abundance. Graphene, since it is present in graphite is thus, obtained automatically alongside.
Who Are The Big Graphite Companies?
Here's a list of the some big graphite companies in the world:
- Asbury Carbons
- Canfield & Joseph Inc.
- Hickman Williams & Co.
- Porter Warner Industries
- Rio Tinto Iron & Titanium America
- Superior Graphite Co.
- Fortune Graphite
- Khorasan Industrial Graphite Company
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