Categories:
Energy
/
General Market Commentary
Topics:
General Energy
/
General Market Commentary
Commentary: The graphite opportunity within the EV boom
One cannot open the paper or go online these days without seeing many articles about the rosy future for electric vehicles (EVs) and grid storage, and the resultant growth in lithium ion battery (LiB) demand.
LiBs are already a $20 billion per year market that’s growing at over 20% annually. This has mainly been the result of growth in the market for handheld devices we are all familiar with.
But EVs and grid storage are already large markets still in their infancy, and the next generation of battery technology is not yet out of the lab. There is a lot of runway left for LiB growth.
LiBs require three main minerals: lithium; cobalt; and graphite, which is the anode material in the batteries. These are small specialty markets while the EV market is huge. Even modest, conservative adoption rates for EVs would have a significant effect on demand for these three minerals.
(Meanwhile, the producers of copper, nickel and various other minerals are now all on the bandwagon. However, while the LiB and EV markets will be important to them, they have much less leverage to it.)
Lithium prices have already taken off, offtake agreements and strategic partnerships have been established and new mines are being built.
Cobalt prices have also risen sharply although the structure of the industry is more problematic with a looming supply problem and related political complexity in the Democratic Republic of the Congo.
Graphite prices, meanwhile, have not really responded to LiB demand growth for a number of reasons.