Glossary | What is graphite?

The graphite supply chain is among the most concentrated of any major battery material, with China at its centre. From raw material extraction to refined anode production, China maintains near‑total control, leaving Western producers heavily dependent on Chinese inputs for EV and energy‑storage batteries.

At the mining stage, China accounts for ~70% of global natural graphite output. The next‑largest producers—Brazil, Mozambique, and Madagascar—operate on a much smaller scale and cannot meaningfully offset China's dominance. Several Western projects in East Africa, North America, and Australia are progressing, but most remain years from commercial output and face permitting, financing, and infrastructure challenges.

Once mined, natural flake graphite must be milled, shaped, coated, and purified into spherical graphite before it can be used in battery anodes. China currently holds over 90% of global spherical graphite processing capacity, with no commercial‑scale facility operating in the US or Europe. Processing, rather than mining, therefore represents one of the main barriers to supply diversification.

China also leads synthetic graphite production, controlling more than 80% of global supply. Producing synthetic graphite requires petroleum or needle coke feedstock and large volumes of low‑cost electricity for high‑temperature graphitisation. Such favourable conditions are rare outside China, meaning Western output remains limited to smaller operations in Japan, the US, and parts of Europe.

At the downstream stage, China controls over 90% of global anode manufacturing capacity. Here, natural and synthetic graphite are combined with binders and conductive additives, then coated onto copper foil to form ready‑to‑use anode sheets. Western capacity in this segment is minimal, creating one of the most significant bottlenecks for planned gigafactory expansions in the US and Europe.

Concerns over this concentration intensified after Beijing's December 2023 announcement of export controls on certain natural graphite materials and processing technologies. While not a full export ban, the requirement for government licences adds cost and uncertainty for foreign buyers. More broadly, the move underscores China's strategic leverage—highlighting graphite as a potential tool of economic influence, similar to rare‑earths in previous supply‑chain disputes.

Global demand for natural flake graphite is forecast to rise from ~1.2m t in 2025 to almost 3m t by 2035 more than doubling within a decade. This growth rate exceeds that of every other major battery material except lithium. As EV production expands and BESS deployment increases, pressure on both natural and synthetic graphite supply chains is intensifying.

In the short to medium term, supply growth is expected to outpace demand, leaving the market oversupplied through the end of the decade. However, demand is projected to exceed supply thereafter, requiring new mine capacity to close the gap. Supply is beginning to diversify away from China, with new capacity ramping up in East African countries such as Tanzania, Mozambique, and Madagascar. Projects in Canada, the US, and Australia are progressing more slowly. Lengthy permitting, financing constraints, and infrastructure limitations mean many are unlikely to begin output before the late‑2020s. Even once operational, converting natural flake into spherical graphite depends on processing capacity that exists almost entirely in China; establishing comparable facilities in Western markets would take several years and require multi‑billion‑dollar investment.

Natural graphite use in batteries continues to face competition from synthetic graphite produced from petroleum or needle coke through high‑temperature graphitisation. Synthetic graphite offers higher purity and consistency but at a greater cost. Recently, however, producers have cut costs by using lower‑grade coke feedstocks, improving competitiveness with natural graphite.

The largest bottleneck lies in anode manufacturing. Recycling could help from the late‑2020s, though economics remain challenging: graphite's low value means reprocessing often costs more than producing virgin material. Policy incentives may nonetheless encourage greater recycled content over time.

Geopolitical factors remain a key uncertainty. Any escalation in US–China trade tensions or tightening of Chinese export controls could strain supply for Western markets.