A newly released report expects auto production and lithium-ion batteries to bolster the U.S. graphite market by nearly 30 percent by 2020.
The analysis by New York-based PMR Research projects the value of the domestic graphite market to increase from $13.6 billion in 2013 to more than $17.5 billion by the start of the new decade. PMR largely attributed the forecast to the increased role of graphite in batteries and in vehicle production.
Graphite is the second-largest component of lithium-ion batteries--crucial components of devices ranging from tablets to electric cars.
Although demand for mobile devices powered by those batteries should continue to rise, the report anticipates a substantial impact from the burgeoning electric car industry. The most high-profile example, a $5 billion Tesla Motors battery plant expected to open in 2017, is expected to account for a 37 percent increase in demand for natural graphite by 2020.
Other components of the auto industry should also bolster the graphite market. Auto makers use graphite to manufacture clutches, motors and exhaust systems, and the analysis noted the material can replace asbestos in linings and brake pads.
In addition, graphite contributes to the making of ultra-lightweight carbon-fiber reinforced plastic, a material gaining popularity in passenger car production.
The report indicated demand for graphite is also expected to increase internationally. In Asia, the largest global graphite market, increasing advanced technologies and higher demand for metals should strengthen graphite demand, while China expects to have about 5 million electric vehicles on its roads by 2020.
In Europe, meanwhile, the graphite market is expected to rise along with demand for carbon fiber in the auto and aerospace sectors.