Prices for both natural and synthetic graphite used in anode active material (AAM) held steady during Q3 2026, halting the widening price gap between the two materials seen earlier this year, according to Benchmark Mineral Intelligence (BMI).
However, the price reporting agency says the stability in midstream AAM prices contrasted with continued volatility in feedstock markets during the three-month period.
The most notable movement came from coke materials used in synthetic graphite production, for which supply was affected by disruptions around the Strait of Hormuz.
Pre-calcined petroleum coke prices rose 6.5% across July and August, while pre-calcined petroleum needle coke also recorded gains, according to BMI.
Graphite tolling fees also increased by 2.3% between June and August, adding further cost pressure for synthetic graphite anode producers.
Despite this, AAM prices remained capped by concerns over oversupply, which BMI estimates will reach nearly 250,000 tonnes in 2026.
The excess supply has given downstream buyers enough leverage to prevent producers from passing higher coke costs through to customers.
“Q3 was characterised by a clear standoff between rising synthetic graphite feedstock costs and an oversupplied AAM market,” BMI anode and graphite research manager Tony Alderson says.
“Producers absorbed the additional cost pressure rather than risk raising prices and losing market share.”
Natural graphite prices diverge
Meanwhile, natural graphite flake prices moved differently depending on region and mesh size during the quarter, according to BMI.
Coarser material weakened modestly in China amid continued oversupply and lower-than-expected demand from industrial end-use sectors.
The +100 mesh, 94–95% C grade fell 1.9% between June and August, while the +80 mesh, 94–95% C grade declined 0.9%.
On an FOB East Asia basis, +80 mesh, 94–95% C material fell 4.2% over the same period, according to BMI.
Overall, the trends align with the firm’s short- to medium-term outlook of ample graphite supply through the remainder of the decade, even as electric vehicle adoption accelerates.
Over the longer term, however, demand for graphite — the dominant anode material in most commercial battery chemistries — is expected to eventually outpace supply.
The International Energy Agency (IEA) forecasts that demand for energy-transition minerals, including graphite, could increase substantially through 2040.
It has also warned that a graphite supply gap could emerge as midstream and downstream development fails to keep pace with growing demand, requiring additional mine capacity.
Supply concentration represents another risk. China currently dominates graphite refining (90%), prompting efforts among Western countries to establish alternative supply chains.
Graphite One builds US supply chain
In the US, Graphite One (TSX-V:GPH) has gained federal support for its plans to establish a vertically integrated domestic graphite supply chain.
The strategy is anchored by its Graphite Creek Project on Alaska’s Seward Peninsula.
According to its latest technical report, Graphite Creek holds more than 71 million tonnes (Mt) of reserves at an average diluted grade of 5.22% graphite, containing approximately 3.7Mt of graphite and supporting around two decades of production.
“New estimates suggest that this one reserve alone could provide enough graphite to meet the entire nation’s needs for a century,” Alaska Governor Mike Dunleavy previously said.
The US Geological Survey has identified Graphite Creek as the largest known graphite deposit in the US and among the largest globally.
In 2025, the project was added to the US Government’s FAST-41 Permitting Dashboard, placing it under a coordinated permitting process. Under a streamlined permitting timeline, a federal decision is expected soon, according to Graphite One.
The company also plans to build an AAM manufacturing facility in Warren, Ohio, to convert graphite concentrate into battery-ready products and has advanced permitting work for the plant.
Québec emerges as graphite hub
Canada is also advancing domestic graphite projects, including Nouveau Monde Graphite’s (TSX:NOU) Matawinie mine in Québec.
The project, designed to be part of an integrated mine-to-battery-material supply chain, was referred to Canada’s Major Projects Office in 2025 and is now under construction.
Located in Saint-Michel-des-Saints, around 120km north of Montréal, Matawinie is forecast to produce about 106,000 tonnes of flake graphite concentrate annually over an estimated 25-year mine life.
Nouveau Monde plans to combine production from Matawinie with a battery materials plant as it seeks to develop what it describes as one of the largest natural graphite operations in the G7.
E-Power advances Québec exploration
Québec’s graphite potential is also attracting earlier-stage exploration.
E-Power Resources (CSE:EPR) has assembled a 12,620-hectare land package in the Tetepisca Graphite District, about 300km north of Baie-Comeau on Québec’s North Shore.
According to E-Power, the area forms part of a significant graphite-bearing region within the Grenville geological province.
The company is focused on systematic surface exploration, with geological surveys, VTEM conductivity data, and sampling completed to date.
A research note by Apollo cited by E-Power estimates the property hosts approximately 188Mt grading an average 12.8% graphitic carbon in the measured and indicated categories.
With near-term oversupply keeping prices under pressure but longer-term demand expected to grow, new projects in the US and Canada are positioning themselves as potential alternatives to the highly concentrated global graphite supply chain.
Write to Jackson Chen at Mining.com.au
Main Image: E-Power Resources
