For the Quarter Ending June 2023
North America
A mixed price trend has been observed in the price of Graphite for the second quarter in the US spot market. The initial phase of the second quarter has observed a decline in demand from the end user of graphite electrodes as the inventory level remained on a higher edge. The US government faced a declining economic situation amid the downfall of major banks across the USA, which created the debt crisis condition in the US spot market. The weakening economy adversely affected the consumption rate of Graphite as the demand for Graphite from the downstream electrode manufacturing industry remained on a lower edge as the Steel making activity slowed down in the local Electric Arc Furnace-based steel mills across the USA. Meanwhile, The price difference between locally manufactured ultra-high power (UHP) and high power (HP) electrodes gets narrowed down with respect to foreign-manufactured electrodes, which increases the competition from overseas markets. According to major market players, there was a reduction in the destocking rate as the major players already had sufficient supply. The US spot market observed a lack of urgency among major electrode-producing companies leading to a hike in local inventory levels. The increase in coke price and challenges in increasing trade rate put downward pressure on the price of Graphite across US mills. The local mills were incited to lower their prices to gain a higher number of orders and uplift the declining market condition.
Asia-Pacific
A mixed-priced trend has been observed in the price of Graphite for the second quarter in the Chinese spot market. The initial phase of the second quarter has observed a decline in demand from the end user of graphite electrodes as the inventory level remained on a higher edge. The demand for Graphite from the downstream electrode manufacturing industry had remained on a lower edge as the Steel making activity slowed down in the local Electric Arc Furnace-based steel mills across China. According to major market players, there was a reduction in the destocking rate as the major players already had sufficient supply. The Chinese spot market observed a lack of urgency among major electrode-producing companies leading to a hike in local inventory levels. The increase in coke price and challenges in increasing trade rate put downward pressure on the price of Graphite across Chinese mills. The price difference between locally manufactured ultra-high power (UHP) and high power (HP) electrodes gets narrowed down with respect to foreign-manufactured electrodes, which increases the competition from overseas markets. The local mills were incited to lower their prices to gain a higher number of orders and uplift the declining market condition.
Europe
The price of Graphite shows a mixed trend for the second quarter in the German spot market. The demand for Graphite from the downstream electrode manufacturing industry had remained on a lower edge as the Steel making activity slowed down in the local Electric Arc Furnace-based steel mills across Germany. The German spot market observed a lack of urgency among major electrode-producing companies leading to a hike in local inventory levels. The increase in coke price and challenges in increasing trade rate put downward pressure on the price of Graphite across German mills. According to major market players, there was a reduction in the destocking rate as the major players already had sufficient supply. The initial phase of the second quarter has observed a decline in demand from the end user of graphite electrodes as the inventory level remained on a higher edge. The price difference between locally manufactured ultra-high power (UHP) and high power (HP) electrodes gets narrowed down with respect to foreign-manufactured electrodes, which increases the competition from overseas markets. The local mills were incited to lower their prices to gain a higher number of orders and uplift the declining market condition.
For the Quarter Ending March 2023
North America
In Q1 2023, the US graphite market experienced mixed sentiments due to varying downstream demand and limited stockpile inventories. In January, the downstream production activity remained low despite strong buyer demand, while high inflation negatively affected demand conditions. The Inflation Reduction Act was passed to increase EV sales, resulting in increased demand for graphite flakes due to strong inquiries from downstream EV batteries. In February, the prices of raw materials upstream of graphite electrodes rose, causing high-cost pressure, and some businesses had to cease operations. Many spherical graphite producers faced narrow profit margins or losses due to the current price of fine flake graphite; some were even on hiatus. In March, the domestic market displayed a bearish sentiment, and new orders for Uncoated Spheroidized Graphite (uSPG) were falling, with major anode producers consuming existing stocks. Despite industry participants remaining optimistic, slow sales growth and high inventories held by Original Equipment Manufacturers (OEMs) suggest that natural or synthetic anode prices will continue to face downside risks.
Asia Pacific
In the first quarter of 2023, the Chinese Graphite market experienced a decline in demand due to sluggish market trends and high inventory levels. The Chinese government ended its subsidy system for EV purchases in January 2023, leading to a short-term reduction in demand for natural anode material. Prices of spherical graphite remained stable, as downstream demand was weak and graphite production capacity was sufficient. However, natural graphite anode prices slightly fell, as battery manufacturers aimed to reduce their costs. The COVID-19 pandemic and the economic environment also impacted end-user consumption, resulting in an increase in battery factories' inventories and destocking. In February, Chinese producers were able to lower their prices in US dollar terms due to the weak US dollar and declining costs and prices of competing synthetic graphite materials. Despite positive industry expectations, slow sales growth in Q1 and high inventories held by OEMs put natural/synthetic anode prices under downside risk. Spherical graphite prices declined due to the EV battery industry's declining demand, while flake graphite prices remained stable due to seasonal production outages.
Europe
In Q1 2023, the German Graphite market saw a decline in prices due to high inventory levels and limited downstream inquiries. Despite seasonally lower output, the demand for graphite decreased, and prices fell due to weakening demand. Graphite flake prices in Europe decreased because of slower demand from traditional sectors, especially the steel industry, and lower freight rates. The reduction in electrified car sales in Germany further weighed on demand. In February, the domestic market displayed a bearish sentiment, while demand in international markets showed a muted upward trend. Spherical graphite producers struggled to make a profit, and some even halted production due to the price of fine flake graphite. In March, high-energy synthetic graphite anode prices dropped, making them more competitive and lowering battery cell costs for automakers. However, several spherical graphite producers faced narrow profit margins or losses due to the current price of fine flake graphite.
For the Quarter Ending December 2022
North America
In the fourth quarter of 2022, Graphite prices in the US market fluctuated due to increased product availability, moderate inflationary pressure, and a positive outlook for downstream demand. According to market participants, the global slowdown accelerated in October, with manufacturing and service performance deteriorating and output contracting more rapidly. According to manufacturers, production activity increased at a marginal rate, assisted by reduced bottlenecks. Despite lower inflationary pressures in mid-Q4, buyers claimed that the graphite demand outlook had worsened. According to market participants, the EV industry was gaining traction in the United States as a result of incentives provided by the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL), but a major impediment to electrification was a lack of domestic EV battery material supply to meet production targets. As a ripple effect, the Graphite Flakes prices for CFR Houston settled at USD 1038/MT.
Asia Pacific
Graphite prices rose in the Chinese market as Q4 2022 approached, owing to logistical concerns and fluctuating downstream demand. According to market participants, logistical issues coupled with geopolitical concerns from the Russia-Ukraine war made downstream Electric Vehicle (EV) battery manufacturers eager to localize their graphite source in October. In November, a sharp drop in freight rates forced manufacturers to lower their quotations. Despite falling prices, demand for Chinese graphite material exports remained subdued. However, a scarcity of large-flake graphite, coupled with relatively high demand from downstream overseas markets, boosted the graphite market in December. According to market participants, tight supply and winter stockpiling drove flake prices to an all-time high in December. Furthermore, subsidies for new energy vehicles were coming to an end, and the consumer stimulus was fading. End-user consumption remained low as a result of the spread of the COVID-19 pandemic and its impact on the economic environment. As a ripple effect, Graphite Flakes (94 %, -100 mesh) prices for FOB Shanghai (China) settled at USD 874/MT.
Europe
In the European market, Graphite prices edged downward in the fourth quarter of 2022 due to a sluggish demand outlook. According to market participants, despite persistently high inflation, elevated energy costs, rising interest rates, and the threat of a recession, production activity remained stable in October. In the face of weak demand and high energy costs, cheaper imports from overstocked inventories undercut prices in mid-Q4. Major European refractories continued to purchase from sources other than China due to worries about "fake flake graphite." According to market participants, demand would not return to Europe's electrode production sectors until electricity prices fell. Downstream consumption was reduced in response to high electricity prices, reflecting a global weakening in consumption that had been reflected in prices. Strong political intentions and rising demand were supporting Europe's natural and synthetic graphite supply chains, but obtaining permits for new projects remained the most difficult challenge. Thus, the Graphite Flakes prices for Ex Hamburg settled at USD 826/MT.
The price of Graphite declined in Quarter 3 of 2022, backed by the weak demand concerns from end-use industries such as Electronics. The lower construction activities have eventually resulted from the region's lower house-building demand, leading to slow demand from this sector in the first half of this Quarter. Meanwhile, several market uncertainties have led to a production cut in the North American region. Besides, the elevation in demand from the downstream industries, such as the manufacturing of electrodes in lithium batteries, increased the market activities of Graphite during September 2022. Furthermore, the U.S Graphite market was impacted by the Chinese squeezed economic growth due to Covid-19 lockdown uncertainties. Thus, the graphite market was persistently tight with diminished export offers.
Graphite prices increased in the third Quarter with rising petroleum costs in the region. China is the primary producer and consumer market for Graphite globally. The commodity price in China's domestic market was impacted by the COVID lockdown uncertainties in the market, and workers' strikes amidst wage disputes hampered production activities in the Chinese market in the Q3 of 2022. Further, prices have also risen due to the elevation in the offers from the EAF industries. The Graphite market has increased due to the surge in inquiries from sectors that produce electrodes for lithium batteries in the region.
German graphite market in the third Quarter of 2022 was stable as supplies from China were constrained due to delayed cargo movement amid port congestion at European ports and elevated Chinese production uncertainties amidst COVID-19 lockdown challenges. Meanwhile, ample supplies squeezed the demand-supply gap in the Quarter ending September 2022 relative to the previous few months, amid constant demand from the E.V. segment. Moreover, stable Graphite demand in energy applications, such as fuel cells, impacted the pricing dynamics of the commodity. The European energy crisis amid the Russian supply crunch weighs on the growth of the graphite market, compelling the manufacturers to revise the product's price.
