US Graphite Price Surge Amidst Limited Supply and Increase Demand from Battery Industry

The Price for Graphite showed a rising price trend in the US spot market after an uplift in demand from the downstream battery and anode material industries from domestic and international markets. Recent deals signed by the major market players, such as Panasonic Energy, Syrah Resources, and several others have proved to be a key factor in the expansion of Graphite’s mining and extraction rate across the local and overseas mining countries. The local authority is providing sufficient support to keep the market on a higher edge along with better economic and financial support. Several policies issued by the US government have played a major role in boosting the demand for Graphite, majorly from the battery and electric vehicle sectors, along with securing a proper supply chain in the US region.

After the supply constraints from the major global producer of Graphite, ie. China, the global market has suffered a condition of tight supply as China covers over 50% of global production. The US spot market had also been affected by the limited availability, shifting the prices towards a rising trend. The US government placed several deals to uplift Graphite mining in regional and overseas mines to stabilize the supply chain in the US spot market. The US-based mineral exploration company, Westwater Resources has noted a significant production increase at its Kellyton Graphite Processing Plant and plans to expand the production further by 25% to an annual output of 12,500 MT per year by 2025. The increase in production is a direct reaction to the escalating demand in the market for battery anode materials manufactured domestically. This demand surge has been further fueled by recent regulatory measures implemented by both the U.S. government and Chinese authorities, particularly regarding Graphite export limitations. Notably, the U.S. Department of the Treasury has issued directives mandating the use of Graphite adhering to the Inflation Reduction Act (IRA) standards in electric vehicle (EV) batteries to qualify for federal tax incentives.

 Furthermore, amidst the recent hike in downstream demand, Nouveau Monde Graphite, a junior company specializing in natural Graphite, has reached a significant milestone by securing an agreement for the offtake of active anode material (AAM), along with a substantial investment totaling USD 87.5 million from Panasonic Energy, General Motors, and additional investors. The recent upliftment in usage from the renewable and clean energy sector has also proved to be a major factor in posing an optimistic approach for the Graphite market in the US region.

According to ChemAnalyst, the price of Graphite is anticipated to remain on a rising trend for the coming months amidst recent deals and a government push to uplift the downstream Graphite battery market. The demand from the downstream anode material, electric vehicles has been expected to remain on a rising trend throughout the quarter, provoking the mills to keep the Graphite prices high in the US spot market.