Most batteries produced are graphite-based. In lithium-ion batteries especially, graphite is the second most important component when evaluated in terms of weight. In fact, the amount of graphite contained in a lithium-ion battery is 10 to 20 times more than lithium itself. The estimates of an independent research firm, which were published in 2012, state that of all graphite used in the battery industry globally, 80% went into the production of lithium-ion batteries.
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Interest from Automobile and Electronics Companies in Lithium-Ion Battery Production to Means Higher Demand for Natural Graphite
The factors mentioned above create an ideal foundation for an escalating demand for graphite because the use of lithium-ion batteries in the automobile sector has been on a noticeable upswing. Companies are going a step further to secure their lithium-ion battery supply by investing in their own factories that will produce the product. A recent example would be that of American automobile company Tesla Motors, Inc., that has appropriated a US$ 5 billion budget for a new factory that will produce lithium-ion batteries. The factory is scheduled to be fully operational by the end of 2017.
And it’s not just the automobile sector that can be credited for creating a wider demand for natural graphite. Batteries being used in cell phones, hand held devices, and other consumer electronic products will play a key role too. Such investments will collectively push up the demand for natural graphite by at least 37% by 2020, say market analysts.
Demand for Graphite Electrode in Asia Pacific Remains Vigorous, Propelled by India and China
From the global perspective, the maximum demand for natural graphite comes from the Asia Pacific region. A number of innovative, technologically-sophisticated applications that draw on graphite are now being seen. Some of these applications include: Solar power systems, pebble-bed nuclear reactors, and fuel cells. Many of these applications are gaining traction in the automotive, aerospace and alternative fuel industries. This has caused the demand for graphite in Asia Pacific to see a rapid upward growth trajectory.
Within the Asia Pacific region, China and India have emerged as the two single largest markets for natural graphite largely because of the promising steel and metal industries here. These industries consume graphite electrode in massive volumes.
China Proves to be Most Fertile Ground for Growth of Graphite Market
Notably, the production of graphite in China far outstrips that of any other country in the world. The country accounts for over 70% of all graphite produced in the world. There are several other initiatives that have led to the remarkable growth of the graphite market in China. But the most important one is the Twelfth Five-Year Plan in China that aims to have at least 5 million battery-electric vehicles ply the country’s roads by 2020. This regulatory push is being seen as a positive development for the graphite market in not just China, but also in Asia Pacific. As the demand for lithium-ion batteries grows, so will the demand for graphite.
Asia Pacific Doesn’t Entirely Overshadow North America and Europe, Where Innovation Drives Graphite Market
While much of the growth of the global graphite market will be concentrated in Asia Pacific, a number of exciting opportunities await graphite suppliers and dealers in Europe and North America as well over the next few years. In the United States, battery-operated vehicles are reporting increased sales every year yet the graphite market is likely to witness a very slight decline. And Europe on the other hand, is the second-largest market for graphite globally. In the traditional markets in these two regions, the increasing use of carbon fiber (as a replacement for steel) in the automobile industry will prove favorable. A number of green technology applications rely on the use of graphite to a great degree.
Market analysts expect the global graphite market to show sustained growth over the next four to five years.
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