Needle Coke Market Poised to Reach Valuation of USD 5,502.2 Million By 2032 | Astute Analytica

Projected to reach USD 5,502.2 million by 2032, the needle coke market is fueled by demand in steel and battery sectors. The Asia-Pacific region leads in production and consumption, while environmental regulations and raw material costs remain key challenges.

New Delhi, May 22, 2024 (GLOBE NEWSWIRE) — The global needle coke market was valued at US$ 2,600.9 million in 2023 and is anticipated to reach US$ 5,502.2 million by 2032 at a CAGR of 8.4% during the forecast period 2024–2032.

Today, needle coke finds its most widespread application in graphite electrodes, followed by lithium battery anode materials, which have shown stable and upward demand. The demand for needle coke in energy storage technologies, particularly in lithium-ion batteries, has been a significant driver of the market’s growth.

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The global production capacity in the needle coke market has seen significant growth in recent years. By 2021, it had reached approximately 3250kt/a, with China playing a dominant role in this expansion. China’s production capacity surged from 250kt/a in 2011 to about 2240kt/a by 2023, claiming an impressive 68.9% of the global production capacity. This growth has been accompanied by an increase in the number of needle coke manufacturers in China, which rose to 21. Furthermore, China has planned and under construction needle coke production capacity of about 430kT/a, indicating continued expansion in the near future. In December 2023, China’s MoM needle coke production increased by 23.76% to reach 62,500 tons. Wherein, production capacity utilization rate also witnessed a 5% increased and reach 25% in the same month.

However, the market is not without its challenges. Volatility in global natural gas and crude oil prices can significantly impact the needle coke market. Additionally, the International Maritime Organization (IMO) implemented a new regulation from January 1, 2020, for a 0.50% global sulfur cap for marine fuels, which has had an impact on the market.

China’s Needle Coke Market: Import and Export Dynamics in 2023

China has experienced significant fluctuations in 2023, with imports showing a declining trend and exports on the rise. In November, imports plummeted by 52.89% month-on-month to 5,700 tonnes, with both oil-based and coal-based needle coke experiencing declines of 53.25% and 52.27%, respectively. South Korea, the UK, and Japan were the top three suppliers, accounting for 89.16% of the total imports.

However, the beginning of the year saw a different picture. From January to February, total needle coke imports in China needle coke market reached 27,700 tons, a 16.88% year-on-year increase, with coal-based needle coke dominating at 63% and accounting for 37.4% of domestic demand. By March, imports had grown by 37.8% month-on-month to 16,400 tonnes, with Japan emerging as the top supplier. On the export front, China’s needle coke exports have been growing. In November, exports climbed by 54.84% month-on-month to 4,800 tonnes, and this trend continued into March with a 56% month-on-month increase to 3,950 tonnes. Advancements in needle coke production technology have contributed to this growth. Year-on-year data reveals that petroleum-based needle coke imports in November 2023 decreased by 29.30% compared to the previous year, while coal-based needle coke imports saw a 79.60% year-on-year decrease. However, from January to November, coal-based needle coke imports increased by 17.24% year-on-year, totalling 65,400 tons.

Key Findings in Global Needle Coke Market

Market Forecast (2032) US$ 5,502.2 Million
CAGR 8.4%
Largest Region (2023) Asia Pacific (60%)
By Grade Intermediate Grade (50%)
By Application  Graphite Electrode (72%)
By End User Aluminum And Steel Industry (48.6%)
Top Trends
  • Increasing demand for ultra-high power (UHP) grade needle coke
  • Growing preference for petroleum-based needle coke over coal-based needle coke
  • Rising adoption of vertical-shaft calcining technology for needle coke production
Top Drivers
  • Surging demand for needle coke in the production of graphite electrodes for the steel industry
  • Growing consumption of needle coke in the aluminum industry for the production of carbon anodes
  • Increasing use of needle coke as a raw material for lithium-ion battery anodes in the electric vehicle (EV) market
Top Challenges
  • Declining Prices of Graphite Electrode
  • Limited availability of high-quality, low-sulfur feedstock for needle coke production
  • Intense competition among major needle coke manufacturers leading to price volatility

Dominance of Intermediate Premium Grade in the Needle Coke Market to Stay Unhindered, Controls Over 50% Market Share

Intermediate premium grade needle coke has emerged as a dominant force in the global needle coke market, capturing over 50% of the market share. This grade is characterized by its optimal balance between quality and cost-effectiveness, making it a preferred choice for a variety of industrial applications. Its moderate coefficient of thermal expansion (CTE), low impurities, and economic viability ensure that it meets the performance standards required by manufacturers while remaining cost-efficient. The global needle coke market is on a robust growth trajectory, with projections estimating a valuation of USD 5.86 billion by 2032, growing at a CAGR of 3.7%. Within this expanding market, the intermediate grade segment secured over 50% of the market revenue in 2023 and is expected to maintain its dominance with a forecasted CAGR of 5.61%. This significant market share underscores the widespread adoption and critical role of intermediate premium grade needle coke in various sectors. One of the primary drivers of demand for intermediate premium grade needle coke is its extensive use in the production of graphite electrodes for steel production.

Graphite electrodes are essential components in electric arc furnaces (EAF) used for steel recycling and manufacturing. The intermediate premium grade is particularly suitable for this application due to its balanced performance and cost. Graphite electrodes are expected to account for 72% of the global needle coke market share, highlighting the critical importance of this grade in the steel industry. Electric arc furnaces, which currently produce around 20% of the steel in the U.S., rely heavily on needle coke, further driving demand. The rapid expansion of the electric vehicle (EV) market is another significant factor propelling the demand for intermediate premium grade needle coke.

As the EV market is anticipated to command a 30% automotive market share by 2030, the consumption of needle coke in batteries is expected to surge. The intermediate premium grade’s cost-effectiveness and performance make it an ideal choice for lithium-ion batteries used in electric and hybrid vehicles. The rising demand for these batteries is fueling the growth of the intermediate premium grade needle coke market, positioning it as a key component in the future of transportation.

Forging the Future: Graphite Electrodes Dominates the Needle Coke Market with Over 72% Revenue Share

Graphite electrodes, integral to the steel recycling process through electric arc furnace (EAF) steelmaking, underscore the importance of needle coke in the industry. Needle coke’s high fixed carbon content, low volatility, and resistance to extreme temperatures and pressures make it the material of choice for these electrodes, ensuring efficient steel production with superior conductivity and stability. The resurgence of the needle coke market is primarily attributed to the demand for graphite electrodes, especially in China, and the burgeoning electric vehicle (EV) sector that requires graphite anodes for lithium-ion batteries. The high-performance demands of these applications have led to a preference for ultra-premium, high-purity needle coke.

Despite the critical role of graphite electrodes, the industry contends with the limited availability and price volatility of high-quality needle coke. Market fluctuations, driven by global economic conditions, trade policies, and geopolitical events, pose challenges to pricing and supply chain stability, potentially causing production delays.

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Aluminum and Steel Industry is Leading Consumer of Needle Coke, their Dominance to Continue in the Years to Come with Over 48.6% Market Revenue

The steel industry remains a major consumer of needle coke market, with the material accounting for approximately 70% of the input cost of graphite electrode production. The demand for graphite electrodes is expected to expand at a CAGR of 3.7% during the forecast period, driven by investments in EAF steel manufacturing and policies to increase scrap steel consumption. The World Steel Association forecasts a rebound in steel demand, which is expected to reach 1,822.3 Mt in 2023 and grow by 1.7% in 2024.

Needle coke is increasingly used in the aluminum industry for the production of graphite electrodes consumed in furnaces. The global aluminum production saw a marginal increase of 2.0% in 2022, indicating a steady demand for needle coke in this sector. China, being the largest steel producer, is also the largest consumer of graphite electrodes. The country has seen a significant rise in the use of steel scrap for recycling, which in turn has increased the consumption of needle coke. The global steel industry’s shift towards more sustainable practices, such as recycling scrap metal, is expected to further drive the demand for needle coke market.

In the aluminum industry, needle coke is used to produce graphitized cathodes, which are crucial for the electrolytic process of aluminum smelting. The high demand for aluminum in various sectors, including automotive, aerospace, and construction, has led to a steady increase in the consumption of needle coke. The aluminum sector’s reliance on needle coke-based electrodes is significant, as these electrodes are essential for maintaining the efficiency and quality of the smelting process. The growing automotive sector, particularly the shift towards electric vehicles, is expected to further boost the demand for aluminum and, consequently, needle coke.

China’s Graphite Electrode Turbulence to Leave Strong Impact on Needle Coke Market: Navigating Through Price Declines and Raw Material Challenges

China’s graphite electrode market is facing a downturn, with prices for high power (HP) and ultra-high power (UHP) electrodes declining amid sluggish demand and diverse raw material usage. As of July 5, 2023, HP electrodes fell to $2,300-2,400 per tonne, while UHP electrodes saw a wider price range of $2,485-3,100 per tonne, indicating a significant spread increase. The cost of needle coke—a key raw material—varies greatly, with imported coke priced at $950-1,700 per tonne and domestic at 6,500-9,500 yuan ($899-1,315) per tonne. This discrepancy has led to price disparities among producers, with those using domestic needle coke able to offer more competitive rates. The steel sector’s reduced consumption has contributed to the electrodes’ price pressure, as steelmakers keep inventories low during the off-peak summer season.

The needle coke market saturation in China has resulted in a decline in electrode prices, necessitating a revival in exports and potential economic stimulus to counteract the current slump. Internationally, the demand for electrodes is challenged by slow market activity and competitive pressures. The disparity in prices, particularly for UHP electrodes, is also influenced by the varying costs of needle coke. The market is in need of a stimulus to boost exports and alleviate the saturation that has led to the current price reductions.

Global Needle Coke Market Key Players

  • Asbury Carbons
  • China Petroleum & Chemical Corporation (Sinopec)
  • GrafTech International Ltd.
  • Graphite India Ltd.
  • Indian Oil Corporation Limited
  • Mitsubishi Chemical
  • NIPPON STEEL Chemical & Material Co., Ltd.
  • POSCO Future M Co., Ltd.
  • Reliance Industries
  • Sojitz Ject Corporation
  • Sumitomo Chemical
  • The Phillips 66 Company
  • Tokai Carbon Ltd.
  • Other Prominent Players

Market Segmentation Overview:

By Product Type

  • Coal based
  • Petroleum based
    • Shaft Calciner
    • Rotary kiln

By Grade

  • Intermediate
  • Premium
  • Super Premium

By Application

  • Graphite Electrodes
  • Silicon Metal & Ferroalloys
  • Lithium-Ion Anode
  • Carbon Black
  • Rubber compounds
  • Others

By End User

  • Automotive
  • Aluminium & Steel
  • Semiconductor
  • Others

By Region

  • North America
  • Europe
  • Asia Pacific
  • Middle East & Africa (MEA)
  • South America

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