The global Graphite market in late 2024 has been significantly influenced by low prices and geopolitical dynamics, with China's predominant role in production being a central factor. Oversupply from China depressed prices and discouraged investment in alternative supply chains, coinciding with weak electric vehicle demand. Germany also experienced declining demand for the commodity from its auto industry. However, shifting geopolitical dynamics and strategic trade measures are expected to restructure the market, potentially leading to a modest price recovery as the market absorbs the oversupply.

Graphite prices in China witnessed a 3% decrease in December. The past year has seen a significant decline of over 20% in battery-grade natural Graphite prices, driven by increased Chinese supply and a slowdown in electric vehicle sales. Finer grade Graphite, used for anodes, has been particularly affected, experiencing the steepest price reductions.

China's Ministry of Commerce (MOFCOM) imposed Graphite export controls to the US in December, potentially disrupting American anode manufacturing. These controls, part of broader restrictions on dual-use item exports to the US, highlight ongoing Sino-American geopolitical tensions, with trade and export regulations used as economic tools.

While production is increasing outside China, establishing new supply chains and completing qualification processes will take time. In response to a Chinese ban, US Graphite producers have petitioned federal agencies for investigations into potential anti-dumping violations, requesting a 920% tariff on Chinese Graphite.

Graphite prices in the US fell by a similar percentage as in China. Despite adequate current supply, a supply-demand imbalance for key battery raw materials led to the price fall. In North America, the sole flake Graphite producer, Northern Graphite, is set to restart its Lac des Iles mill in Quebec following a November maintenance shutdown, with plans to increase prices and double annual output to approximately 25,000 tonnes.

In Germany, prices of Graphite decreased by 3% as a slow switch to battery-powered cars deepened the woes of the country’s flagship auto industry. In 2024, Europe's biggest automotive market saw a registration of only 380,609 electric vehicles, marking a decrease of 27.4 percent from the previous year, as reported by the KBA federal transport authority.

The proposed US tariff on Chinese manufacturers could significantly alter the electric vehicle (EV) industry, potentially causing a surge in battery production expenses. Simultaneously, the declaration of force majeure at Syrah Resource's Balama Graphite mine may contribute to rising costs. Moreover, the Trump administration's consideration of reversing Biden's EV and emissions initiatives, along with their suggestion to implement worldwide tariffs on battery materials to boost domestic production, suggests a turbulent period ahead with escalating prices.