Graphite Prices Trend and Forecast
North America
In Q1 2023, the US Graphite Prices
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 Prices 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.
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