Shares of graphite manufacturers have become attractive as reports emerge that this raw material, in which Mozambique is the second producer globally, is in short supply at a time of strong demand.
Graphite is, as is known, a key component required for the production of lithium batteries and, in addition, graphite electrodes are used in the production of steel and aluminium.
There is a huge global demand for lithium batteries from the automotive sector as the world is rapidly shifting towards green mobility to combat climate change. In that regard, just recently, Elon Musk’s Tesla announced it has plans to use Mozambique graphite to become the first source of supply within the United States (of graphite anode) for the electric vehicle industry and lithium battery production, with the agreement confirming precisely Mozambique graphite (Balama mine, operated by Australia’s Syrah Resources Limited in Cabo Delgado) as a product of “strategic importance for use in new energy.”
In line with the growing demand for graphite from car manufacturers amid its apparent scarcity, shares in companies that handle its production have been in increasing demand. Listed shares of Indian graphite companies, for instance, rose 56 per cent in the last quartile of 2021, while HEG shares rose 84 per cent during the same period.
But the growth actually becomes exponential if we extend the period under review to the last five years, and there we see Graphite India’s shares rising 446 per cent, while HEG’s a whopping 885 per cent.
And India is just one example of a market that is expected to reach $25.70 billion annually by 2028, according to the recently released Global Graphite Industry Share, Growth, Value, Outlook and Forecast Report, released by Fortune Business Insights™.
The global graphite market size was USD 13.60 billion in 2020. Based on the analysis, it is projected to grow from USD 14.83 billion recorded in 2021 to USD 25.70 billion in 2028 at an annual rate of 8.2% during this eight-year period.
China is the largest producer of graphite, followed by Mozambique and Brazil, according to the statistics.
