Graphite Market Forecast: Top Trends for Graphite in 2025

By Finance News On Aug 18, 2025

The natural graphite market faced pressure in 2024 as supply and demand trends created a deficit.

As the year progressed, slower-than-forecast end-use segment demand, production uncertainty and moderate investment in capacity growth outside of China remained the dominant sector themes.

A late-year recovery in global electric vehicle (EV) sales and a positive long-term demand outlook have positioned the graphite market for a mild recovery in 2025. However, with China dominating global supply, factors such as geopolitical tensions, export restrictions and policy changes could quickly alter the landscape.

“The risks to relying on China have really been highlighted over the last year. (In December 2023), China announced export licenses for graphite products,” James Willoughby, senior research analyst for graphite, energy transition and battery raw materials at Wood Mackenzie, explained to the Investing News Network (INN).

“While they didn’t amount to much overall, China has once again threatened to tighten export controls this year, which could prevent battery anode producers receiving the raw materials required.”

The synthetic graphite market is less exposed to Chinese disruption as it is less geographically concentrated.

“Although synthetic graphite producers are better off, natural graphite anode producers are almost completely reliant on China, so there’s a lot of concern around this at the moment,” Willoughby added.

Even though the Wood Mackenzie expert doesn’t foresee China limiting exports, incoming rules on US imports are adding pressure on North America to grow its domestic supply chain. “While we expect China to continue to allow battery-related exports, companies are looking to diversify their supply to reduce the risk,” he said.

“On top of this, there is a need to shift away from China for the US battery supply chain. The Inflation Reduction Act (IRA) specifies that by 2027, any batteries that contain graphite from China won’t be eligible for substantial tax credits. While it’s not clear which of these will remain under the new administration, we expect the requirements for non-Chinese material to continue.”

Graphite market facing dual supply challenges

Natural graphite production ballooned in 2022, when global mine supply reached 1,680,000 metric tons, a 73.9 percent increase from 2020’s 966,000 metric tons. Global output then registered a small 4.6 percent decline in 2023, totaling 1,600,000 metric tons; however, the reduction was enough to send the market into deficit.

According to Tony Alderson, senior analyst for Benchmark Mineral Intelligence, the shortfall in the graphite sector has been attributed to rising demand from the battery anode segment.

“EV demand is set to rise by nearly 400 percent over the next decade. As such, the need for both natural and synthetic graphite is rising notably in line with this,” Alderson wrote in an email to INN….