For the Quarter Ending December 2022
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.
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.
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.
For the Quarter Ending September 2022
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.
In North America, the price of Graphite increased throughout the second quarter. The price increase is due to the increasing demand from the EAF (Electric Arc Furnace) industries, where Graphite Electrodes are used to melt steel scrap. The rising demand from the industries which is manufacturing electrodes in lithium batteries has also contributed to the rise in the market value of Graphite. Furthermore, U.S. reliance on China for Graphite, a key ingredient in batteries, has emerged as a significant obstacle to electric-vehicle makers' production schedules amid trade disputes and soaring demand. Thus, the graphite market is tightening, especially for grades suitable for use in batteries, as demand rises robustly.
Graphite Flakes increased throughout the second quarter because the prices for Synthetic Graphite Powder increased. The price of petroleum was hiked in China's domestic market, and calcined petroleum coke is the by-product left out after petroleum refining. Graphite Flakes are used in fewer amounts as an additive in Graphite Electrode products to enhance the working of Synthetic Graphite Powder to finalize the Graphite. China is the leading production and consumption market for Graphite globally. Prices have risen due to the increasing demand from the EAF (Electric Arc Furnace) industries, where Graphite Electrodes are used to melt scrap steel. The market value of Graphite has increased as a result of an increase in demand from industries that produce the electrodes for lithium batteries.
German graphite market was hit hardest in the second quarter of 2022 as supplies from China continue to be constrained due to high freight costs and delayed freight transit times at major ports in China. Although supplies have improved in May relative to the previous few months, increased demand from the European E.V. segment and continued delays in Chinese shipments pushed the prices. In addition, flake graphite is used in energy applications such as fuel cells, vanadium-redox battery technology, and pebble-bed nuclear reactors. The growing energy industry is propelling the growth of the flake graphite market, compelling the manufacturers to increase the product's price. At the same time, low inventory availability, increasing demand, and advancement in uses of the product have lifted its prices.