How Is Rising Steel Production Propelling Graphite Market Growth?

A number of factors, such as the expanding electronics sector, burgeoning steel production, and soaring lithium-ion (Li-ion) battery demand, are expected to fuel the graphite market at a CAGR of 7.4% during the forecast period (2020–2030). According to P&S Intelligence, the market revenue will rise from $19,092.9 million in 2019 to $36,889.1 million by 2030. In recent years, the increasing usage of graphite in pebble-bed nuclear reactors, for generating electricity from uranium fuel, has become a prominent market trend.

The burgeoning production of crude steel, on account of the surging need for steel and steel products in the oil & gas, residential, automotive, and construction sectors, is one of the key contributors to the market growth, globally. According to the World Steel Association, 1,864.0 million tons of steel was manufactured across the globe in 2020. The consumption of graphite in the steel industry is increasing, owing to its excellent durability, exceptional strength at extreme temperatures, and high corrosion resistance capacity. 

At present, the graphite market is fragmented in nature with the presence of numerous industry players, such as Syrah Resources Ltd., SGL Carbon SE, Graphite India Ltd., Shanshan Corporation, HEG Ltd., Showa Denko K.K., Tokai Carbon Co. Ltd., and GrafTech International Ltd. Currently, these players are merging with and acquiring other companies to stay ahead of their competitors. For instance, in December 2019, Showa Denko K.K. completed the acquisition of Hitachi Chemical Ltd. for $8.8 billion. This acquisition aimed at consolidating the position of the former as a leading supplier of graphite to manufacturers of Li-ion batteries.

Geographically, Asia-Pacific (APAC) held the largest share in the graphite market in 2019, due to the flourishing manufacturing sector and the increasing investments in the EV industry, in the region. In regional market, China generated the highest revenue in 2019, owing to the extensive production of crude steel and electric-arc-furnace-based steel in the country. Furthermore, the APAC market is also expected to witness the fastest growth during the forecast period, due to the largescale production of graphite electrodes in India and China.

Thus, the rising crude steel production and the escalating demand for Li-ion batteries will boost the demand for graphite, worldwide, in the coming years.

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