The global graphite market is facing a bifurcation event. As China moves to curb "irrational competition" and enforce stricter capacity controls, Western supply chains are aggressively mobilizing to mitigate a projected 30% supply deficit by 2035. High-grade projects in the US and Canada are receiving unprecedented government backing to break the Asian monopoly on anode materials. Titan Mining’s Kilbourne Graphite Project has secured a $120 million Letter of Interest from the US EXIM Bank, while the IEA warns that removing China from supply calculations leaves the rest of the world able to meet only half of its demand.
China’s Ministry of Industry and Information Technology (MIIT) recently convened with top battery executives (CATL, BYD, EVE Energy) to address "involutionary" (excessive) competition. The directive to strictly control capacity expansion and crackdown on IP violations signals a potential consolidation phase that could artificially restrict export volumes and raise global floor prices for battery materials.
De-Risking via Domestic Production In direct response to supply concentration risks—where China controls over 90% of graphite refining—North American assets are being fast-tracked. Titan Mining’s Kilbourne Graphite Project in New York has secured a $120 million Letter of Interest from the US EXIM Bank, underscoring the asset's strategic importance. The project boasts an after-tax NPV(7%) of $513 million and could supply nearly 50% of US natural graphite demand.
Similarly, Sunrise New Energy has secured a $30 million contract to supply 10,000 tons of synthetic graphite anode material, validating the demand for non-Chinese supply chains in high-growth sectors like energy storage and UAVs.
The Looming Deficit The IEA warns that despite diversification efforts, removing China from supply calculations leaves the rest of the world able to meet only half of its demand for battery metals by 2035. Copper and graphite are particularly vulnerable. For copper, a 30% supply deficit is projected by 2035 due to declining ore grades and lengthy permitting timelines. This macro backdrop creates a premium environment for near-term producers in Tier-1 jurisdictions.
Graphite: Strongly Bullish. The combination of Chinese capacity controls and Western localization incentives (EXIM funding) creates a perfect storm for price appreciation. Projects with near-term production potential like Kilbourne are prime beneficiaries.
Supply Chain Security: Critical. The "China Plus One" strategy is no longer optional; it is an existential imperative for OEMs. Expect further M&A activity targeting North American graphite and anode producers.