About Graphite

Benchmark Minerals Graphite Price Assessment


Graphite is a naturally occurring form of carbon and is an excellent conductor of both electricity and heat. It is becoming increasingly important as a critical strategic component in advancing alternative energy solutions including wind and solar power, hybrid vehicles and other alternative energy use. It is also a mainstay of the steel production industry. 

Graphite is also the largest component of lithium-ion batteries, which are in increasing demand. A graph shown by Visual Capitalist highlights the stat that graphite demand from batteries is on pace to increase 10.5x by 2030. 

Graphite comes in two forms: natural graphite, which is mined, and synthetic graphite, which is produced from petroleum coke or coal tar. 

Natural Graphite 

Synthetic Graphite 

  • Naturally occurring in mineral deposits 
  • High energy consumption in the production 
  • Extracted from the ground in open-pit mines 
  • Produced from petroleum coke or coal tar 
  • Small carbon footprint 
  • Large carbon footprint harmful to the environment 
  • Relatively inexpensive to produce 
  • Expensive to produce 
  • 1-2kg of Carbon dioxide per kg of graphite 
  • 4.9kg of Carbon dioxide per kg of graphite 

China is the largest player globally in terms of consumption and production capacity for graphite, producing both synthetic and natural graphite. According to Statista, in 2020, China produced an estimated 650,000 metric tons of graphite. Canada is currently ranked as the 10th largest producer of graphite. 

The primary driver for graphite demand today has been economic growth within China in addition to emerging economies including India. Prices rose from about US$700/tonne for large flake graphite to almost US$3,000/tonne in 2012, highlighting global dependence on China which accounts for 70-80% of world production.

New applications such as lithium-ion batteries, fuel cells, and nuclear power have the capabilities to create significant incremental demand growth for graphite in the future. 

The demand for lithium-ion batteries in China is projected to grow rapidly due to manufacturing growth in the EV sector and for on-grid and off-grid energy storage applications. In fact, each hybrid electric car uses about 22 pounds of graphite, while a fully electric auto uses about 110 pounds. 

In global terms, the graphite market was valued at USD 14.3 Billion in 2019 and is expected to reach USD 21.6 Billion by 2027, registering a CAGR of 5.3% from 2020 to 2027 according to a report published by Valuates Reports in the Chemical Industry Category.

With concentrated production being in China, the graphite produced has to travel across the world before reaching Western markets like the United States & Canada. These extensive shipping distances increase the risk of disruptions in the graphite supply chain.

This has created the consensus that new graphite mines outside China will be crucial to meeting graphite’s rising demand and tackling a potential supply deficit. 

Over the past few years, Canada’s interest in the graphite area has spiked, primarily due to the announcement of Tesla’s plans to source the lithium, graphite and cobalt needed for its several lithium-ion Gigafactories. This will provide excellent opportunities and demand for domestic supply chains moving forward. 


Visualizing the Natural Graphite Supply Problem

Graphite to ride the wave of massive EV battery production 

Graphite Market Size is Projected to Reach USD 21.6 Billion by 2027 at CAGR 5.3% | Valuates Reports     

Major countries in worldwide graphite mine production from 2010 to 2020  

Graphite Market by Type (Natural Graphite and Synthetic Graphite) and Application (Lubrication, Refractories, Foundry, Battery Production, and Others) - Global Opportunity Analysis and Industry Forecast, 2014-2022