Hi guys I posted this on linked-in, food for thought.
https://www.linkedin.com/pulse/spherical-graphite-huge-demand-lack-supply-race-doctor-fouad?published=t
Spherical graphite : Huge Demand, Lack of Supply, the race is ON
Graphite demand for lithium-ion battery anodes will increase 3 fold from 80,000 tpa in 2015 to at least 250,000 tpa by the end of 2020 according to benchmark minerals estimates. Its a race to who could service the burgoening spherical graphite market. The demand is there, its growing fast, but there is insufficient and inconsistent supply. As the anode material of choice for lithium ion battery manufacturers, spherical graphite demand ultimate enemy is the availability of supply of the material itself. The huge demand is there and growing fast, but supply is lacking and growing slowly.
The situation is unsustainable, and if suppliers of spherical graphite fail to satisfy the huge demand for natural graphite as an anode material, battery manudacturers will turn to something else, either they will continue using the higher cost but consistent option the synthetic graphite (from petrolum coke), or they will accelerate the development of new anode technologies like silicon (tesla-panasonic are increasing relentlessly the amount of silicon (now only 5%) in their anodes compared to graphite), lithium metal, graphene coated silicon or sulfur based anodes (sony's 2020 new lithium ion batteries) or other new anode technology.
For Sony new anodes that do not recquire graphite to be commercialized by 2020 :
https://www.digitaltrends.com/cool-t...ch-40-percent-capacity-may-reach-phones-2020/
Quote : "The magic bullet is sulfur, apparently. Sony’s new batteries are based on a hybrid lithium-sulfur design: they swap the plain negative electrode in lithium-ion batteries for a sulfur-based one, and retain the lithium-based positive electrode. That has allowed the company to dramatically increase energy density — up to 1,000Wh/L, or 40 percent larger than your run-of-the-mill, 700Wh/L lithium-ion battery." End of Quote.
For Tesla-Panasonic efforts to use more silicon in their anodes :
https://chargedevs.com/features/tes...y-a-closer-look-at-silicon-anode-development/
Quote : "The cells that contain silicon today – including those used in consumer electronics that have been on the market for a few years – contain such a small amount that it’s not really changing the equation. It’s a small percentage of the anode material, and the majority of capacity is still coming from the graphite. However, battery-makers clearly intend to find ways to overcome the challenges, and add more silicon. As Musk said in July’s announcement, Tesla “expects to increase pack capacity by roughly 5% per year” (although not all of those increases will be solely due to adding more silicon)." End of Quote.
For predictions regarding the future demand of spherical graphite by 2020 :
https://benchmarkminerals.com/Blog/graphite-demand-from-lithium-ion-batteries-to-more-than-treble-in-4-years/
Quote : "Demand for graphite (carbon) used as anode material in lithium ion batteries is set to increase by over 200% in the next four years as global cell production surges on the back of maturing pure electric vehicle demand and the inception of the utility storage market.
New data from Benchmark Mineral Intelligence forecasts the anode market – which is nearly exclusively served by naturally sourced spherical graphite and synthetically produced graphite – to increase from 80,000 tpa in 2015 to at least 250,000 tpa by the end of 2020 while the market could be as large as 400,000 tpa in the most bullish of cases with no supply restrictions.
Taking the most conservative case, Benchmark estimates that over 360,000 tonnes of medium flake graphite will be needed as a feedstock source for the spherical material by 2020. This is nearly a doubling of the flake concentrate market in 2015 should the natural-to-synthetic demand proportions remain the same in 2020.
At present, China produces 100% of the world’s spherical graphite which is predominately sourced from mines in Heilongjiang province in the country’s north-east. Demand is being underpinned by major expansions in the lithium ion battery industry that are underway worldwide as the sector matures from megawatt plants to gigawatt scale operations." End of Quote.
The situation of graphite is completely different to that of lithium. There is no short-term-medium term better alternatives to lithium in the batteries. So when lithium demand surges, and there is lack of supply, prices will inevitably surge. Thats not the case for spherical graphite, which derives its attractivity from its lower cost and lower price for battery manufacturers. At a certain price threshold and lack of supply, instead of higher prices, battery manfacturers will simply start shifting to new better anode technologies.
Conclusion :
So either graphite suppliers accelerate their efforts to supply the burgeoning spherical graphite market (there is no lack of natural flake graphite deposits to be mined, but rather a lack of purification, spheoridizing and coating of graphite processing facilities), or graphite miners would miss the transport electrification revolution and continue relying on the poor demand drived from the steel industry for their product.
Its a race and the clock is ticking, battery manufacturers wont wait.