Synthetic Graphite Market Size, Share & Trends Analysis Report By Type (Graphite Anode, Graphite Block (Fine Carbon), Other Types (Graphite Electrode, etc.)), By Applications (Metallurgy, Parts and Components, Batteries, Nuclear, Other Applications) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global synthetic graphite market size was valued at USD 2,369.36 million in 2022. It is projected to reach USD 3,926.85 million by 2031, growing at a CAGR of 4.70 % during the forecast period (2023-2031). Factors like high demand in the metallurgy segment drive the synthetic graphite market growth. 

Graphite is a carbon mineral with several uses, from electric vehicles to refractories, foundries, lubricants, and building materials. Graphite has many properties, such as its resistance to wear and thermal stress, ease of machining, and high metal removal rate, which have contributed to its widespread adoption. Though it is not a metal, graphite has several characteristics typical of metals, including high stiffness, strength, and conductivity of electricity and heat. The anodes of lithium-ion batteries that electric power vehicles are made of synthetic graphite.

Synthetic graphite has gained more attention recently as the production of electric vehicles (EVs) has accelerated. It is a crucial part of the anodes used in the lithium-ion batteries powering these vehicles. Battery customers are shifting toward using more natural graphite as an anode in their cells. However, they are still blending it with synthetic graphite due to lower production costs, environmental and CO2 impact concerns, and ease of scaling supply. 

Market Dynamics

Market Drivers:

High Demand in Metallurgy Segment

In metallurgical applications, graphite is utilized in various forms, including electrodes, refractories, bricks, monolithic crucibles, etc. In the electric arc furnace (EAF), synthetic graphite is used to produce steel, ferroalloys, and aluminum. In metallurgical processes, such as melting scrap iron in an electric furnace, polishing ceramics, producing compounds like calcium carbide, and other processes requiring high-temperature and clean energy sources, synthetic graphite electrodes are used as a source of energy.

The use of synthetic graphite in metallurgical applications is anticipated to be driven by the increased global production of crude steel and aluminum. Based on their ability to carry an electric current, synthetic graphite electrodes are produced in a variety of grades, including ultra-high power (UHP), high power (HP), and regular power (RP). According to the World Steel Association, crude steel production climbed from 1,879 million tons in 2020 to 1951 million tons in 2021. It is anticipated that as the production of essential metals and alloys like steel and aluminum rises, synthetic graphite will also drive the market.

Market Restraint:

High Costs Compared to Natural Graphite

Natural graphite is taking the place of synthetic graphite in applications where it was previously the only option because of recent developments in its purification and modification. Purified natural flake graphite is more electrically and thermally conductive than synthetic graphite because it has a higher degree of crystallinity. Natural graphite is the material for heat sinks, fuel cells, and gaskets because it can be exfoliated and pressed into sheets, unlike synthetic graphite. Due to its superior qualities and vastly different cost from synthetic graphite, researchers are currently looking into using natural graphite in lithium-ion battery anodes.

Spherical graphite is created from natural flake and has better qualities than synthetic graphite, which costs about USD 18,000 per kilogram for these batteries. It is offered for sale for roughly USD 6,000–10,000 per kilometric ton, making it a very cost-effective product and a way to lower the price of automobile battery systems. Synthetic graphite is a valuable source of graphite for energy storage due to its purity. However, it is difficult for producers of electric vehicles to reduce costs to a point where widespread adoption is feasible due to its high cost and unfriendly manufacturing process.

Market Opportunities:

Increasing Demand for Electric Vehicles

The anodes of lithium-ion batteries that electric power vehicles are made of synthetic graphite. Synthetic graphite has gained more attention recently as the manufacture of electric cars (EVs) has accelerated. It is a crucial part of the anodes used in the lithium-ion batteries powering these vehicles. Battery customers are shifting toward using more natural graphite as an anode in their cells. However, they are still blending it with synthetic graphite due to cheaper manufacturing costs, environmental and CO2 impact concerns, and ease of scaling supply. However, due to the low purity of natural graphite materials, the ratio of natural to synthetic graphite in car batteries is 10% natural and 90% synthetic. Over the past ten years, the global synthetic graphite market for electric vehicles has made tremendous strides. However, despite the recent growth in the number of EVs in the world, the industry is expected to expand more over the next ten years due to rising worries about emissions and shifting environmental policies by central governments worldwide.

Regional Analysis

The global synthetic graphite market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA. 

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 5.66% during the forecast period. China is one of the world's greatest graphite producers, mainly because of the enormous demand from emerging industries like lithium-ion batteries, electronics, steel, solar energy, and nuclear power. Japan and Korea, who had held the second and third spots for the previous ten years, were overtaken by China to take the top place. The improvement in position is primarily attributable to supportive government policies, a sizable manufacturing base, protectionist regulations, and expanding battery demand, all of which bode well for the Chinese battery market. China is the world's leader in solar energy production and is also the location of one of the largest solar farms (in Tengger Desert). For the foreseeable future, it is anticipated that the country will continue to be the biggest investor in renewable energy.

In addition, China wants to significantly boost the amount of solar energy it uses, enhancing demand for the country's market research during the projection period. India, one of the biggest emerging markets for electric vehicles in the following years, has a significant potential need for lithium-ion batteries and the accompanying raw materials, including synthetic graphite. Under its Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles Phase II (FAME-II) program, the Indian government is promoting electric mobility. It has set an ambitious goal of producing 175 GW of power from renewable sources by 2022. In addition, the government aims to have at least 15% of the nation's automobiles electric by 2030.

Europe is expected to grow at a CAGR of 2.36% during the forecast period. Solar photovoltaics (PV) are expected to play a significant role in Germany's transition to renewable energy sources. Adopting innovative technologies to increase productivity and government backing to enhance installation capacity may drive the country's solar photovoltaic business in the coming years. Over the past few years, the steel industry in the UK has been in decline. This is primarily a result of rising imports from China, where steel production is more affordable despite having high electricity prices. To address this issue, the administration declared in 2016 that it would reduce energy costs, alter national EU emission laws, and take import restrictions into account.

Additionally, considering the influence on the export activities of locally produced steel to other regions of Europe, Brexit significantly impacted the steel sector. The decreased demand caused domestic steel producers to reduce production, which is bad for the domestic market for synthetic graphite electrodes. However, many steel producers in the nation are choosing to lessen the environmental harm from the carbon dioxide emissions that occur while making steel. Steel production via the EAF approach is the preferred choice to address ecological concerns. Currently, buildings all around the nation have more than 500,000 solar panels installed. By 2022, however, it is anticipated that there will be more than 10 million solar installations worldwide. The demand for synthetic graphite is expected to increase during the forecast period.

The United States is one of the top five countries importing synthetic graphite. The government is a significant player in the synthetic graphite manufacturing market, with producers including US firms like Asbury Carbons, GrafTech International, and Superior Graphite, as well as SGL Group from Germany and Showa Denko from Japan. The rising trade tariffs gave the United States domestic steel manufacturing industry new life, which also helped the nation's demand for synthetic graphite molds. The bulk (almost 70%) of the steel produced in the United States is produced using the EAF method due to the government's emphasis on promoting environmentally friendly production techniques throughout the nation. In 2020, the United States produced about 72 million metric tons of steel. By enhancing the plant's performance indicators and lowering the production's operational expenses, the nation's producers of synthetic graphite electrodes have been gaining leverage in terms of profits.

Canada is putting itself in a position to lead in a new era of nuclear power (SMR) through its investigation into the use of tiny modular reactors. During the forecast period, the country's stance on nuclear energy generation will play a significant role in the growth of the global market there. In Canada, nuclear energy generates 15% of the nation's electricity. There are 22 nuclear power reactors spread over five sites in three provinces. The Canadian Nuclear Safety Commission has been asked to approve the construction of a new nuclear power facility in the country. During the projected period, the market is anticipated to be driven by the country's expanding nuclear power generation. Therefore, during the projected period, all such trends in end-user industries are expected to fuel national consumption of synthetic graphite.

The Brazilian steel sector is currently experiencing a severe crisis that is primarily attributable to the demand for Chinese steel and the decline in demand from the key consumers of Brazilian steel—the automobile, machinery, and equipment-building industries. Due to the country's improving economic situation, sluggish development in steel output is predicted for Brazil in the upcoming years. Consequently, it is anticipated that in the forthcoming years, the demand for synthetic graphite electrodes used in steel manufacturing applications will expand gradually. Argentina relies heavily on imported solar components, and the development of solar plant implementation projects is proliferating. Most producers of solar components are prepared to invest and increase their manufacturing capacity to fulfill the anticipated demand. This component will open up new growth opportunities for materials like synthetic graphite.

Segmental Analysis

The global synthetic graphite market is segmented by type and application.

Based on type, the global market is bifurcated into graphite anode, graphite block (fine carbon), and other types (graphite electrode, etc.). 

The graphite anode segment is the highest contributor to the market and is estimated to grow at a CAGR of 7.6% during the forecast period. The advantage of synthetic graphite in lithium-ion battery applications is that lithium atoms can be inserted between its graphene layers to create an intercalary compound (example: LiC6). This enables low irreversibility and resistance to the exfoliation phenomenon during the initial load/discharge cycle. With its abundant carbon hollow nanostructures (OCHNs), which resemble onions, synthetic graphite has a high specific capacity of 460 mAh per gram at 20 milliamperes and an excellent rate capability with a maximum reversible capacity of 310.3 mAh per gram at one ag.

Synthetic graphite is a promising anode material for high-performance lithium-ion batteries, especially when compared to the benefits of conventional graphite anode materials. Although synthetic graphite is more expensive than natural graphite as an anode material, it is preferred for high-end batteries due to its superior purity. Most battery anode manufacturers utilize synthetic and natural materials to balance costs and performance. However, thanks to synthetic graphite's reduced electrical resistances and higher uniformity, advanced technologies like NCA and NMC 811 are starting to employ it more frequently.

Synthetic graphite blocks are made using the same petroleum coke method as electrodes, with a slight variation in the structure of the coke used. The isostatic, extruded, and molded processes create these blocks. These procedures are all utilized to produce graphite for various uses, and each one has unique advantages. Applications for synthetic building blocks are very diverse, ranging from the fabrication of polysilicon for the solar sector to high-temperature reactors in the nuclear business. Graphite that has been extruded is created in a variety of shapes and sizes. Compared to isotropic graphite, which has roughly ten times larger grains, extruded graphite has coarser ones.

Additionally, extruded graphite has several distinctive qualities, including increased thermal and electrical conductivity, thermal shock and chemical resistance, and bending. Extruded graphite has less strength, though. Hot isostatic pressing creates the strongest synthetic graphite (HIP). As a result, it works perfectly for applications including solar energy, LEDs, semiconductors, electrical discharge machining (EDM), the glass sector, and chemicals.

Based on application, the global market is bifurcated into metallurgy, parts and components, batteries, nuclear, and other applications. 

The metallurgy segment owns the highest market and is estimated to grow at a CAGR of 3.57% during the forecast period. Graphite is used in various ways in metallurgical applications, including electrodes, refractories, bricks, monolithic objects, crucibles, etc. In the electric arc furnace (EAF) process, synthetic graphite is used as an anode to produce steel, Ferro alloys, and aluminum. Synthetic graphite electrodes are used in metallurgical processes, such as melting scrap iron in an electric furnace, polishing ceramics, producing compounds like calcium carbide, and others that call for a high-temperature and clean source as a source of energy. Based on their ability to carry an electric current, synthetic graphite electrodes are produced in a variety of grades, including ultra-high power (UHP), high power (HP), and average power (RP). The use of synthetic graphite in metallurgical applications is anticipated to be driven by the increased global production of crude steel and aluminum. However, it is expected that the market demand will be uncertain due to erratic trends in producing these metals.

When carbon graphite is added to a necessary material, it imparts several qualities that enhance application performance, including superior strength, high electrical and thermal conductivity, and reduced porosity. Its use in parts and components is mostly in various valves and seals, primarily in electrical and mechanical applications. Its applications include a labyrinth and mechanical seals utilized in the fluid and gas industries. For the most part, packing seals, polymeric, elastomeric, or metallic lip seals, resin-bonded graphite seals, shaft seals, labyrinth seals, and ring seals are among the mechanical seals that use carbon graphite.

In less developed countries and on older machinery, packing seals are mainly utilized for straightforward sealing tasks. The market's use of these seal types is declining due to end-user expectations for longevity, low maintenance requirements, and low leakage rates. Despite being cheap, polymeric seals are only occasionally used in the market because of their poor duty. However, resin-bonded, shaft, labyrinth, and ring seals are frequently employed in industrial applications because they may be utilized with heavy-duty materials and because users expect them to last longer and have lower leakage rates.

Impact of covid-19

Recent Developments

• May 2022- Shanshan Technology, the Vancouver-headquartered company, announced a memorandum of understanding (MOU) with Sunrise (Guizhou) New Energy Material Co., Ltd., a lithium-ion battery anode producer based in Guizhou Province, China. Sunrise is a subsidiary of Global Internet of People, Inc., an online knowledge-sharing and enterprise service platform that trades on the Nasdaq under the symbol SDH.
• December 2022- NOVONIX Limited, a leading battery materials and technology company, announced an update on its plans to scale its U.S. production of high-performance synthetic graphite anode materials following the recent announcement that KORE Power, Inc. (“KORE”) closed its initial USD 75 million of an anticipated total USD 150 million in funding.