It doesn’t sound all that interesting. It’s not considered a precious metal, and its name doesn’t bounce around the market like zinc, lead or lithium does.
But it’s actually somewhat of a hidden gem in the metals sector.
Graphite is a naturally occurring form of carbon. It has an extremely high resistance to heat, which comes in handy for many industrial applications.
There are many different forms of graphite, and each one is better suited for a different purpose. It’s eco-friendly and chemically inert, making it a safe material to work with.
As the most stable form of carbon, it’s a great material to use for things like lubricants and brake linings. Graphite also plays a significant role in the steel sector. And, with recent upward growth in the field, we can expect to see this reflect in the value of graphite.
We’ll see it’s greatest rise, however, from its usage in the production of lithium-ion batteries. Interestingly, there’s almost 40-times more graphite than there is lithium in one of these batteries! Perhaps ‘graphite-battery’ just doesn’t have the same ring to it.
The demand for lithium-ion batteries is set to increase alongside the development of electric vehicles, so graphite demand shouldn’t peak any time soon. That is, unless they find a replacement material…
Unfortunately, silicon is looking like an ideal alternative to graphite in lithium-ion batteries. It can store up to 10-times more energy, which is appealing to battery makers. It’s downside, however, is that silicon expands and contracts when charging — not a good feature when it comes to battery life.
So, at least for the foreseeable future, it’s graphite all the way.
Graphite’s Supply Giant
With this increase in demand comes the threat of short supply, which is putting the graphite miners under pressure.
China is the primary supplier of graphite, which means they have the greatest influence over this market sector.
However, environmental concerns have minimised China’s exports, leading to tight graphite supplies across the globe.
Of course, this could all right itself in time, which is why it’s good to keep an eye on graphite stocks.
Unlike precious metals like gold and silver, graphite isn’t traded as a commodity.
However, you can trade in the businesses which fall in line with its production. This makes the graphite market a little less clear cut, because it’s influenced by so many factors. Yet another reason why it’s good to keep a close eye on it.
Here at Money Morning, we have the latest news on the market trends and price of graphite. Check out our latest findings down below.