The US graphite industry, despite its over-supply in the market, experienced an increase in price as it ended December. This came as a result of growing demand from the battery industry. However, because of tariffs that are being imposed on imported graphite, it is now becoming an industry that is less reliant on imports.
US graphite prices in December registered a small 1.2% increase, and it seems that the factors leading to these movements include oversupply, lack of demand in industry, and stable demand in the battery market. Even as the market witnessed caution in most downstream sectors, the stable demand for lithium-ion batteries prevented any free fall of prices. This trend was witnessed despite graphite demand being exposed to a complicated trade environment, characterized by prolonged customs clearance and increasing shipping costs.
Supply side pressures continued to increase as more stringent checks of export permits at Chinese ports prolonged the clearance process by almost a week. This forced trading groups to enter their forward contracts earlier than usual, and as such, spot deliveries became tighter in the US market. Freight rates on the Shanghai-Houston service heightened by 3.5% in the second half of December 2025, thus increasing landed costs of imported graphite and mildly pressuring pricing.
In terms of demand, the demand for graphite, which is driven by the energy storage and electric vehicles market, remained strong. The automaker sold 16.2 million units in the US market for the year, which marked a 2.4% increase from 2024, thus supporting the demand for graphite anode material in the long run. Steel and foundry demand continued to exhibit cautious buying, thus not supporting the demand for graphite.
The month of December saw significant progress for the US graphite industry. The US Export Import Bank increased its financial potential to over USD 2 billion in the Alaskan to Ohio graphite supply chain for Graphite One, a wise choice as the USA remains largely import-dependent. The Graphite Creek resource, identified by the United States Geological Survey as the largest in the USA, will service an Ohio plant with the capability to produce up to 100,000 tons per annum of anode material. Simultaneously, Titan Mining initiated ore feeding for its Kilbourne graphite demo plant in New York, a crucial step towards enabling the resumption of comprehensive USA natural flake graphite production. The proposal aims to increase production to a 40,000 tons per annum commercial facility, sufficient for the satisfaction of almost half the USA’s current demand for natural flake graphite.
Additionally, policy changes are also transforming the market dynamics. The US has imposed tariffs on natural graphite, which is a part of its overall policy to target the supply chain of the lithium ion battery industry. A 25% tariff on natural graphite is expected to kick in in the year 2026, which is a result of worries about import dependency and China's strong dominance in the worldwide supply chain.
Looking forward, the price of graphite in the US market will continue to be positive due to risks in the value chain and starting to ramp up local projects. Even if the trend of reductions in freight costs and the start of production of synthetic graphite moderates, the expansion of anode production for battery cells will ensure steady demand. The market embarks on 2026 with renewed emphasis on security of supply and cost issues and growing local production of graphite.
