Graphite, among others, is an integral component of electric vehicle (EV) batteries and with a surge in EV sales which is forecasted to reach 23 million in 2030 as communicated by UNCTAD in July 2020, the demand for Graphite is anticipated reach unprecedented heights. Despite initiatives and ongoing discussions on altering the battery chemistry and research into new active anode materials graphite would remain as one of the preferred active anode materials used in lithium-ion batteries. Before delving into the various aspects of the graphite markets from 2019 onwards, it is pertinent to note that the global lithium-ion battery market or manufacturing industry has been forecasted to grow at a CAGR of 15.33% by Knowledge Sourcing Intelligence LLP from a market value of US$34.163 billion that has been estimated for 2018 to attain a market value US$80.392 billion in 2024. Additionally, the global electric motorcycles & scooters market has been forecasted to grow at a CAGR of 6.07% by Knowledge Sourcing Intelligence from a market value of US$11.798 billion that has been estimated for 2018 to attain a market value of US$16.807 billion in 2024.
Graphite is also known for providing adequate energy density for several portable power applications and is acknowledged for being a reliable material. In this regard, it is relevant to note that the global power bank market has been forecasted to grow at a CAGR of 13.03% by Knowledge Sourcing Intelligence LLP from a market value of US$16.867 billion that has been estimated for 2019 to attain a market value of US$35.173 billion in 2025. Further lithium-ion batteries are integral to global military operations, thus making it another factor that is expected to augment the growth of the global graphite market. To this end, it is relevant to pay attention to the global military battery market which according to Knowledge Sourcing Intelligence LLP has been forecasted to grow at a CAGR of 4.85% from a market value of US$2.119 billion that has been estimated for 2017 to attain a market value US$2.815 billion in 2023. Both natural and synthetic graphite is used in anodes of lithium-ion batteries.
One of the main stimuli in the graphite industry during 2019 was China’s sustained efforts to shift away from upstream production to downstream production, which was substantiated by increasing imports mainly from Africa. On the other hand, the operator of the largest natural graphite project outside China which is the Balama graphite project in Mozambique - Syrah Resources (ASX: SYR, OTC Pink: SYAAF) reduced its output in September 2019 from 15,000 metric tons (Mt) per month to 5,000 Mt per month as a direct response to a sudden and material decrease in Chinese spot graphite prices, a decrease that has been impacting price negotiations and contract renewals as communicated by a member of the apex leadership of the company. Also, it is relevant to note that the graphite market has been impacted by the trade tensions, reduction in Chinese EV subsidies, recent steep depreciation of the Chinese yuan, and additional production from Madagascar and China. Conversely, such reduction has reportedly created room for other potential graphite projects to be operationalized. 2019 also marked a positive influence in the graphite market by the battery industry. Also due to the lifecycle benefits that the producers can obtain in comparison with spherical graphite had led to strong growth potential for the synthetic segment of the Chinese graphite market. Whereas other Asian markets where producers have reportedly overcome the challenges with the use of natural-dominant anode blend have growth prospects for the natural segment of the global graphite market.
Progressing to 2020, just like every other market, the COVID 19 pandemic had impacted the global graphite market’s supply side, particularly that of outside China. China’s resilience in the face of COVID 19 stems from the fact that flake and synthetic production zines are located quite far away from coronavirus epicenters. Even with regards to the intermediate-stage production of anode material in Korea and Japan, there has been resilience to the impact of COVID. Also, irrespective of prevailing surplus, graphite and anode markets are given special emphasis by the regional governments of China as a strategic industry which has resulted in plans of several major expansions which signals the nation’s continued efforts of strengthening China’s supply base. Besides the languid application demand pertaining to refractory grades which is anticipated to influence the global graphite market growth, globally, the overall market is expected to perform exceptionally well. Moreover, despite a low graphite pricing environment, many miners reportedly aspire for higher valued graphite-based products such as spherical graphite or graphene. Notable progress towards commercialization has been made Viz. a binding Letter of Intent (LOI) was signed in November 2020 betweenTrebor RX Corp and ZEN Graphene Solutions Ltd. (TSXV: ZEN) that constituted the initial purchase of the latter’s graphene-based viricidal coating (which is patent-pending) intended for a minimum of 100 million masks/filters. This led to the rise in Zen’s stock price which was up by 358% throughout 2019 and since September 2020 it was up by 293%.
Besides, from the perspective of initiatives, in November 2020, it was reported that Tesla Inc (NASDAQ: TSLA), had plans to utility giant Southern Co (NYSE: SO), rideshare company Uber Technologies Inc (NYSE: UBER), and others that comprise 24 utilities, EV-charging companies, EV manufacturers and battery suppliers who have constituted a trade group called Zero-Emission Transportation Association which are advocating for policies on consumer incentives and emissions targets that will expedite the adoption of EVs as well as increased federal investments in charging infrastructure. Also, the 4th quarter of 2020 according to the world steel association witnessed the growth of global crude steel output which during October was in the order of 61.89 million tons an increase by 3.5% from the 156.36 million tons produced in September. Also, during October 2020, Bass Metals (ASX: BSM, GR: R2F, OTC: BSSMF) as per its quarterly activities report, carried its exploration at Graphmada graphite mine in Madagascar with a focus on developing a continuous unit of mineralization between the Mahela and Loharano deposits.