Global Graphite Market Growth – Augmenting Tomorrow’s New Normal
The global graphite market is anticipated to achieve a market size of USD9.402 billion by the end of 2025 from the market value of USD7.451 billion which has been estimated for 2019 after surging at a CAGR of 3.95%. Owing to its metallic properties of electrical and thermal conductivity as well as its non-metallic properties like inertia and lubricity, industrial applications pertaining to the automotive industry especially electric vehicles (EVs), brushes for electrical motors, consumer electronics, graphite electrode facilitating EAF (Electric Arc Furnace) method of still production, lubricants, among others. Besides natural graphite, synthetic graphite to scrap from discarded machined shapes have good prospects since it competes with naturally occurring graphite as it is being used in iron and steel production. Further, secondary synthetic graphite and synthetic graphite powder derived from machining graphite shapes compete for use in battery applications. According to U.S. Geological Survey (USGS), as of 2019 world’s inferred graphite resources exceeded 800 million tons of recoverable graphite and during the same year, more than 60% of the world’s graphite was produced by China, whereas 4% of the world’s graphite was contributed by Canada and Mexico.
Total Production of Crude Steel
In thousand metric tons
Source: World Steel Association AISBL
Besides, the global trade, in general, was already decelerating in 2019 before the advent of the COVID 19 pandemic due to trade tensions which had impacts on the economic growth as which was indicated by a slight decline in global decline in merchandise trade during 2019 by -0.1% in volume terms after rising by 2.9% during 2018. Supplementarily, despite government interventions with monetary and fiscal policy to counter the slump and provide temporary income support to businesses and households as was the case during the global financial crisis of 2008-09, social distancing measures and restriction of movement has a profound impact on travel, transport and thus supply of labor and raw materials, which was not the case with the financial crisis. This development has led to the shutting down of a significant share of manufacturing affecting national economies around the world. Concerning the steel industry, which is the biggest consumer of graphite, despite such rise in crude steel production mentioned above the total global export of iron and steel reduced to $ 417,796 million in 2019 from $ 470,283 million in 2018 partially substantiating trade deceleration of 2019 which is further estimated to plunge during 2020, and would influence the global graphite market growth.
From the perspective of world merchandise trade volume, as of October 2020, it has been forecasted to decline by 9.2% and is anticipated to rise by 7.2% in 2021. Additionally, the decline in services trade during the pandemic has been in the order that is equivalent to that of merchandise trade. Nevertheless, the COVID 19 crisis has benefited some services, which is true in the case of information technology services. The demand for such services increased since companies around the world were required to put telecommuting (more commonly known as work from home) into practice and also because people started socializing remotely. This requirement also necessitated households, businesses, and governments to upgrade their computers and information technology infrastructure to facilitate working from home. Thus, the telecommunications equipment trade that is inclusive of smartphones had risen by 2% from the same period a year ago. Electronics besides telecommunication also held up stemming from work from home.
World Telecommunications Equipment Exports
In Millions of US$
Source: World Trade Organization
The end-user segment of electronics is poised to hold a significant share in the global graphite market enabling its projected growth during the forecast growth
The aforesaid is further substantiated by the increase in computers and electronic components trade that witnessed double-digit trade growth as reported by WTO in December 2020. After registering positive growth in the 2nd quarter trade in computers and electronic components accelerated in the 3rd quarter by 11% and 10%, respectively. Further, the trade-in telecommunications equipment that comprises smartphones improved year-on-year in the 3rd quarter compared to that of the previous quarter. However, due to declines in Chinese exports by 13% during September resulted in an 11% decrease. Additionally, the COVID 19 pandemic not only influenced the manner in which we work but also has influenced the manner in which we consume. This is particularly pertinent in the case of the temporary closure of many bricks and mortar businesses as well as food and beverage establishments and the dissuasion of establishments to avoid public gatherings. In view of above consumers have turned to online solutions to purchase goods and services which range from household groceries, ICT products, and medical goods.
Also, there has been an upswing of digital deliverables like streaming media stemming from an increased subscription of over-the-top is a streaming media service which has also made it conducive for organizations to expand their broadband internet footprint. Further, the extent to which the end-user segment of electronics is anticipated to drive the growth of the global graphite market especially catapulted by COVID 19, is exemplified by a few developments during 2020 that are being provided below to provide a contextual perceptive. As reported by UNCTAD the, Cambodian startup Grocerdel which delivers fresh farm produce and locally made products in the capital Phnom Penh witnessed its orders skyrocket by over 180% since people have sought eCommerce to procure their daily needs. The startup also reportedly witnessed its sales increasingly nearly 165%. Thus, in light of this massive demand for online shopping means, the commerce ministry of the Cambodian government had passed an e-commerce law in 2019 which is also in line with its efforts to strengthen the country’s e-commerce ecosystem, whereby the cost of registration has been reduced by 40% to ease the burden of formalization for startups. This is one such example whereby both shift in consumer paradigm and government incentives are expected to fuel the demand for consumer electronics as well as telecommunications equipment enabling a surge in demand for graphite during the next few years because this “new normal” is here to stay and further evolve because of the variety of convenience it offers.
Leave a ReplyWant to join the discussion?
Feel free to contribute!