If you’re looking to get a head-start on the next big commodity price increase, experts say graphite is a good bet.
Disclaimer: we’re not sharing investment advise here. This is an automotive news portal.
According to an analysis from oilprice.com, graphite may be the next commodity whose prices will inflate. This is thanks to its important role as the anode in battery cells that go into electric vehicle (EV) battery packs.
Graphite makes up 30% of your typical EV battery, where lithium may make up about 1% of its overall composition. We’ve seen many car brands finally pivoting to electric in the last two years. One of the biggest moves coming when Toyota recently showed 15 new electric vehicles. Besides that, many car brands are also shutting down internal combustion engine development and expanding their own battery factories. In Europe, you have 38 gigafactories on the horizon. In the USA, at least 13 are planned, including Tesla’s new Texas plant, 3 Ford gigafactories in Tennessee and Kentucky, 4 GM gigafactories in cooperation with LG Chem and LG Energy Solution, 2 Stellantis gigafactories with LG Energy and Samsung SDI, one Toyota gigafactory in North Carolina, and another gigafactory with Volkswagen at their existing Tennessee plant.
Not only carmakers, but the electrical grid itself will start to rely more on large scale battery storage solutions as the world moves towards clean energy sources like wind and solar. The batteries act as a buffer for these clean energy plants for there to be reserve energy is needed when demand is high and energy generation is low. In the US alone, clean energy storage is anticipated to grow US$426 billion over the next decade, and this could be reflected in the demand for graphite.
What’s more, the supply of graphite comes mostly from China. In fact, 70% of the world’s graphite comes from there and the US hasn’t produced graphite for many decades. It looks like graphite could just be the next black gold. We suggest reading the article linked above, as it has more information about graphite production and the companies involved.
