Global production of natural graphite reached a historical high of approximately one million tonnes in 2008, following five years of modest annual growth of 2.5%. According to Roskill Information Services Ltd:

• China accounts for approximately 80% of world graphite supply, but growth in its run-of-mine output has slowed in the current decade
• There have been significant increases in output in some of the other producing countries since 2001, including Brazil (3.7% p.a.), Sri Lanka (6.2% p.a.) and North Korea (3.5% p.a.)

Consumption of flake graphite is growing at the expense of amorphous graphite in most markets and accounts for at least 50% of consumption in mature industrialized economies. Estimated global consumption of natural graphite in 2008 was approximately 1.1 million tonnes, of which 71% was in Asia, and 43% specifically in China. China’s consumption slightly exceeds its production as China has begun drawing aggressively on its stocks and has become a net importer; nearly all of North Korea’s exports are bound for China. In 2008, North America accounted for 4% of consumption with the United States importing 58,251 tonnes of graphite; the United States is the world’s fourth largest importer.

Flake graphite accounts for 40% of world production, resulting in a favourable mismatch with demand. The main applications for natural graphite have predominantly been within the iron and steel industries. Among natural graphite, flake material is preferred by most manufacturers of refractories, batteries, crucibles, pencils, powder metallurgy and lithium ion batteries. In the medium and long term, flake will be the form of natural graphite required by the more compelling areas of growth in graphite demand.

There has been significant upward pressure on the price for high carbon grade, large flake graphite over the last 10 years with a notable increase since 2008. The substantial growth in demand for graphite has been impacted by the fuel cell industry and its need for electrodes and conductive separators being developed for the automotive sector, magnesia and alumina refractories and secondary batteries such as lithium-ion and lithium polymer batteries.