Graphite prices experienced a downturn in China during March due to increased supply. This decline is linked to broader trends of cheaper, oversupplied battery materials and ongoing advancements within the battery industry, occurring even as overall battery demand remains stable.

Despite healthy auto sales, demand for fresh graphite took a hit in China this March. Manufacturers felt comfortable using up the supplies they already had on hand rather than placing new orders. Other users were also cautious, just topping up essentials rather than stocking up significantly. This reluctance to buy meant the existing oversupply problem lingered.

Consequently, the pressure mounted, causing graphite prices to drop by 5% in China over the month. With so much production capacity already in place, the feeling is that plans for further expansion in China's graphite industry will likely be put on hold for a while.

Across Europe, graphite prices edged down slightly (by 1.5%), reflecting the real difficulties facing the region's battery industry. Many companies hoping to build or expand battery factories are hitting pause or even abandoning those plans altogether – they're simply worried about whether they can turn a profit right now. This hesitation means less demand for graphite. European battery makers are already in a tough spot, wrestling with higher costs compared to their Chinese counterparts. They're also struggling to build complete local supply chains, find enough workers with the right skills, and compete effectively against the much larger, established players in Asia.

Adding to the cautious mood, while German home builders saw a small improvement in orders, the general feeling across industries remains nervous due to broader economic uncertainty. With factories worldwide not running at full steam and ongoing trade tensions, it feels unlikely that demand for graphite will bounce back quickly, keeping prices under pressure for the foreseeable future.

In the U.S., the story for graphite sellers was even tougher, with prices falling much more sharply than elsewhere. It seems like a double hit: there was already too much graphite available domestically, and at the same time, the cost to ship goods internationally plummeted. Just in March, global container shipping costs dropped significantly (down 17.5% by one measure), and bringing goods from Shanghai to New York got cheaper, adding to the downward pressure on prices.

Looking ahead, there's also uncertainty brewing around potential shifts in government policy away from supporting electric vehicles. If the EV market slows down as a result, the need for graphite – a key ingredient in their batteries – will naturally shrink. All told, most signs point to graphite prices staying low, or even falling further, in the coming months.