India Graphite Market Analysis
The relevance of research
The object of this study is natural graphite. Graphite is a mineral quite common in nature, usually found in the form of scattered flakes, or their sheet aggregates (crystalline flake graphite), dense granular aggregates (crystalline lumpy graphite), or dense cryptocrystalline masses (amorphous graphite)
Purpose of the study
Analysis of the state of the graphite market, assessment of the market volume, analysis of competitors, as well as identification of factors affecting the graphite market
Content
Part 1. Overview of the Indian Graphite Market
1.1. Main characteristics of the market
1.2. Dynamics of the graphite market volume 2017-2021 Potential market capacity
1.3. Assessment of factors affecting the market
1.4. Graphite Market Life Cycle Stage
1.5. Competition from substitute products
Part 2. Competitive analysis in the graphite market
2.1. Major players in the market
2.2. Market shares of the largest competitors
2.3. Profiles of major players
Part 3. Analysis of graphite production
3.1. Volume and dynamics of domestic production of graphite
3.2. Export share in graphite production
3.3. Segmentation of graphite production by regions
3.3.1. Production by Union Territories
3.3.2. Production by states of India
Part 4. Analysis of foreign trade supplies of graphite
4.1. Volume and dynamics of graphite imports
4.2. Import structure
4.3. Graphite export volume and dynamics
4.4. Export structure
Part 5. Analysis of graphite consumption
5.1. Dynamics of graphite consumption volume
5.2. Analysis of the results of tenders for the purchase
Part 6. Price Analysis
6.1. Average producer prices by union territories
6.2. Average consumer prices by states in India
Part 7. Assessment of factors of investment attractiveness of the market
Part 8. Forecast of graphite market development until 2026
Part 9. Recommendations and conclusions
Research excerpt
Part 1. Overview of the Indian Graphite Market
1.1. Main characteristics of the market
The object of this study is natural graphite.
Natural graphite is a gray substance with a metallic luster, amorphous, crystalline, or fibrous structure, greasy to the touch, specific gravity from 1,9 to 2,6 g/cm. Due to the difference in color, graphite that has a lead luster is called silver, and shiny black is called black.
Graphite crystal is an allotropic modification of carbon, the most stable under normal conditions.
Graphite is a fairly common mineral in nature, usually found in the form of scattered flakes, or their sheet aggregates (crystalline flake graphite), dense granular aggregates (crystalline lumpy graphite), or dense cryptocrystalline masses (amorphous graphite).
There are deposits of crystalline graphite, associated with igneous rocks or crystalline schists, and cryptocrystalline graphite, formed during the metamorphism of coals.
The main areas of application of natural graphite:
- metallurgy (production of crucibles, casting molds, refractory products, non-stick paints);
- oil and gas industry (lubricant);
- electrochemistry (galvanic cells);
- mechanical engineering (brake pads and linings, self-lubricating mechanical parts - bearings and gaskets).
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Graphite is also an important mineral for lithium-ion batteries and is expected to increase in demand in the near future. Meeting this growing demand will require an increase in the supply of both natural graphite and its synthetic counterpart. As demand for graphite grows, developing a sustainable graphite supply chain is critical to the world. New graphite mines will be key to meeting growing demand for graphite and combating potential supply shortages.
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A significant part of the balance reserves of crystalline graphite requires reassessment, since their development is impractical for a number of reasons - low quality and poor dressing of ores, location in nature protection zones or protective pillars.
There is a significant reserve of undeveloped deposits in the world, however, the quality of most ores is not high enough and the conditions for their development are difficult.
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Diagram 2. The ratio of imported and domestic products in the graphite market in 2017-2021,%
1.2. Dynamics of the graphite market volume 2017-2021 Potential market capacity
Consider the dynamics of the volume of the graphite market in India.
Over the course of 2017-2021, the arithmetically calculated dynamics of the Indian graphite market in physical terms is spasmodic ...
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1.3. Assessment of factors affecting the market
Consider the main factors affecting the graphite market and, accordingly, the demand…
Economic
GDP (gross domestic product) is used to determine the rate of economic development of any state. GDP is a macroeconomic indicator that reflects the total value of goods, works and services that were produced and provided in the country in a year. Gross domestic product is the main indicator on the basis of which the level and pace of the country's economic development are determined.
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Graphite is widely used in metallurgy, oil and gas industry, chemical production and mechanical engineering. Development vectors and trends in the main graphite consuming industries will have an impact on the market.
So, positive production indices for 2021 - early 2022. in the industries shown in the table support the graphite market.
Table 1. Production index in India by type of activity in 2015-2022 (Jan-Feb.), % to the previous year
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Socio-demographic
The population of India influences the graphite market indirectly through consumer industries.
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technological
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Increasing requirements and setting new goals on the part of consumers encourage manufacturers to use more and more high-tech methods for the extraction and enrichment of graphite, which can increase productivity and yield of products from the mineral.
It is also necessary to pay special attention to the growing worldwide interest in electric vehicles. The fact is that in the battery of each electric car there is at least 100 kg of flake graphite. The development of the market for electric vehicles can lead to an increase in demand for batteries and could double the global demand for graphite.
Diagram 10. Sales of plug-in and electric vehicles in the world and share in the total fleet in 2010-2021, thousand units, %
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Political and legal
The state provides support for investment projects in terms of the development and production of natural graphite.
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Geological exploration, including the prospecting and evaluation of mineral deposits, exploration and mining in India is subject to compulsory licensing. Because graphite is a mineral, the development of its deposits is also subject to compulsory licensing.
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Thus, the development of graphite deposits must comply with the norms of the law ""On Subsoil"".
Table 2. STEP analysis of factors influencing the graphite market, the Indian graphite market is currently experiencing a positive influence of environmental factors of weak strength
The negative impact is manifested due to a decrease in the population, government restrictions, the global trend towards a decrease in graphite production, etc.
The following factors have a positive effect on the market: GDP recovery, the dynamics of consumer industries in India, state support, and technological factors.
1.4. Graphite Market Life Cycle Stage
The graphite market is at the stage of life cycle maturity. This is evidenced by:
- Absence of a tendency to increase the volume of consumption of products in physical terms;
- Increasing requirements for product quality on the part of customers;
- Manufacturers are looking for technological improvements.
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1.5. Competition from substitute products
In metallurgical production, graphite is widely used for carburizing various grades of steel and cast iron. However, the use of natural material does not always make it possible to effectively solve production problems. In this case, it is more appropriate to use artificial graphite.
The use of this material is most appropriate when metals are separated from melts or solutions by passing direct current through them.
Artificial graphite allows you to solve problems that natural material cannot cope with due to its unique thermophysical, chemical, and mechanical properties. This type of graphite has a high level of electrical conductivity.
A feature of this type of material is also its porosity. The properties of artificial graphite largely depend on its structure and size. Thus, by changing the technological characteristics of the forming process, the fineness and composition of the raw material, it is possible to obtain a material that will have the required properties.
This type of graphite is resistant to high temperatures, and demonstrates excellent strength, as well as resistance to oxidation in air in the range up to 400 degrees Celsius. It is distinguished by high anti-friction characteristics.
Part 2. Competitive analysis in the graphite market
2.1. Major players in the market
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1. Tax benefits for income tax (in accordance with Article 284.3 and Article 25.8 of the Tax Code of India):
Federal budget:
- 0% within 10 years from the date of receipt by the project participant of the first income from the implemented project
Regional budget:
- no more than 10% during the first 5 years from the moment the project participant receives the first income from the implemented project
- at least 10% over the next 5 years from the moment the project participant receives the first income from the implemented project
2. Tax incentives for the mineral extraction tax. Possibility of applying a reduction factor characterizing the territory of mineral extraction (in accordance with Article 342.3 and Article 25.8 of the Tax Code of India):
- 0 - during the first twenty-four months (tax periods)
- 0,2 - from the twenty-fifth to the forty-eighth month (tax period) inclusive
- 0,4 - from the forty-ninth to the seventy-second month (tax period) inclusive
- 0,6 - from the seventy-third to the ninety-sixth month (tax period) inclusive
- 0,8 - from the ninety-seventh to the one hundred and twentieth month (tax period) inclusive
- 1 - in subsequent months (tax periods)
The status of a ASEZ resident provides the following benefits:
- 0% income tax, property tax, land tax for the first 5 years
- 0% import and export customs duties
- 0% VAT on imports for processing
- 7,6% insurance premiums instead of 30% for the investor for the first 10 years
- free land and ready-made infrastructure
- expedited exporter's VAT refund procedure
- no inspections without the consent of the Ministry for the Development of the Far East
- ""one window"" for the investor
- Free customs zone
- simplified state control
- accelerated and facilitated administrative procedures, including obtaining a building permit, customs clearance.
The launch of this project could have a significant impact on the competitive environment in the Indian graphite market.
2.2. Market shares of the largest competitors
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2.3. Profiles of major players
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Part 3. Analysis of graphite production
3.1. Volume and dynamics of domestic production of graphite
Diagram 13. Dynamics of graphite production volumes in India for 2017-2021, thousand tons
Graphite production volumes have undergone significant changes every year in the last decade.
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Such multi-vector dynamics of domestic production is due to the small absolute volume of the market, when one or several large contracts or a significant temporary increase / decrease in production volumes of one enterprise can significantly affect the market volume at the end of a particular year.
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The combined revenue of the two largest graphite producers in India is characterized by undulating dynamics throughout 2017-2021.
3.2. Export share in graphite production
As mentioned earlier, in calendar 2020, graphite exports exceeded production, which leads to an incorrect value of the share of exports in production. Taking into account the estimated redistribution of volumes, the share of exports in production in 2019 and 2020 was about ...%, respectively.
3.3. Segmentation of graphite production by regions
3.3.1. Production by Union Territories
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According to Rosstat, during 2017-2021, the volume of graphite production in India was distributed between two territories - the Ural Union Territories and the Siberian Union Territories, where the enterprises of the main players are located.
3.3.2. Production by states of India
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Part 4. Analysis of foreign trade supplies of graphite
4.1. Volume and dynamics of graphite imports
Diagram 18. Volume and dynamics of graphite imports in monetary terms in 2017-2021, mln USD
The dynamics of graphite imports in the period under review has a spasmodic character: in physical terms, the indicator fluctuated ...
4.2. Import structure
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Over ...% of graphite imports are supplied to India from non-CIS countries and only ...% - from CIS countries.
4.3. Graphite export volume and dynamics
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Diagram 21. Balance of exports and imports in 2017-2021, thousand tons
During 2017-2021, the foreign trade balance for graphite was characterized by both a negative and a positive balance.
4.4. Export structure
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Part 5. Analysis of graphite consumption
5.1. Dynamics of graphite consumption volume
The dynamics of domestic consumption of graphite in India in value terms is uneven and depends on the ratio of market components - production, imports and exports, as well as average producer prices.
5.2. Analysis of the results of tenders for the purchase
According to the EIS in the field of procurement and IS Fira.Pro, for the period from April 1, 2021 to March 31, 2022, according to Federal Law-44, only 6 contracts were concluded in total, including graphite in the subject of purchase.
We present detailed information on contracts in the form of a table.
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Analysis of information on contracts under FZ-44 for the supply of graphite showed that:
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Part 6. Price Analysis
6.1. Average producer prices by union territories
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Producer prices in the Union Territories are higher than in the Union Territories.
6.2. Average consumer prices by states in India
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In this section, the consumer price refers to the wholesale price at which the company sells products to the customer.
Due to the fact that graphite is not included in the monitoring of prices by Rosstat, an independent search for prices was carried out from offers for the sale of graphite.
Based on the analysis carried out, the following conclusions can be drawn:
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Part 7. Assessment of factors of investment attractiveness of the market
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A comprehensive assessment of the factors of investment attractiveness of the graphite market is 1,06 points - a neutral investment climate. The positive factors of the investment climate in the processed marble market dominate over the negative ones. This means that within the industry under consideration, the prospects and potential for development prevail over the difficulties and problems that hinder the development of enterprises in the industry and the entry of new operators.
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Part 8. Forecast of graphite market development until 2026
We will analyze the market based on methods based on identifying trends over time, adjusted for expert opinion in the industry.
According to the MED forecast
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Part 9. Recommendations and conclusions
The relevance of the graphite market is due to its wide application in industry.
A feature of the graphite market is a possible time gap between the moment of mining and enrichment of ores, which is reflected in the statistics of Rosstat, and the period of sale of graphite for export, which is reflected in the data of the Federal Customs Service, and therefore the statistics of the ratio of imports, exports and production may be distorted.
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Market companies are recommended to:
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Diagrams
Figure 1. Natural graphite
Diagram 2. The ratio of imported and domestic products in the graphite market in 2017-2021,%
Diagram 3. Dynamics of graphite market volume, 2017-2021, thousand tons
Diagram 4. Revenue (net) from the sale of graphite by union territories for 2017-2021, %
Chart 5. Dynamics of India's GDP, 2012–2021, % to the previous year
Diagram 6. Volume of graphite production in the world in 2014-2021, thousand tons
Chart 7. Monthly dynamics of the US dollar against the rupee, 2015-2022 (Jan-Mar), Rs. for 1 US dollar
Diagram 8. Population dynamics in India as of January 1, 2010-2021, million people, %
Diagram 9. Population forecast in India for the period 2021-2024, million people
Diagram 10. Sales of plug-in and electric vehicles in the world and share in the total fleet in 2010-2021, thousand units, %
Figure 11. Graphite Market Life Cycle Stage
Diagram 12. Shares of the largest competitors in the graphite market in 2021, %
Diagram 13. Dynamics of graphite production volumes in India for 2017-2021, thousand tons
Diagram 14. Dynamics of the total revenue of the largest producers (TOP-5) of graphite in India, 2017-2021, million Rs.
Diagram 15. The share of exports in production for 2017-2021, %
Chart 16. Graphite production by states of India in 2021,
Diagram 17. Volume and dynamics of graphite imports in physical terms in 2017-2021, thousand tons
Diagram 18. Volume and dynamics of graphite imports in monetary terms in 2017-2021, mln USD
Diagram 19. Dynamics of export of graphite in physical terms in 2017-2021, thousand tons
Diagram 20. Dynamics of graphite export in monetary terms in 2017-2021, mln USD
Diagram 21. Balance of exports and imports in 2017-2021, thousand tons
Chart 22. Structure of exports by countries in 2021, %
Diagram 23. Dynamics of graphite consumption in monetary terms, 2017-2021, million Rs.
Diagram 24. Forecast of graphite market volume in 2022-2026, thousand tons
Tables
Table 1. Production index in India by type of activity in 2015-2022 (Jan-Feb.), % to the previous year
Table 2. STEP analysis of factors affecting the graphite market
Table 3. The main companies participating in the graphite market in 2021
Table 4. Profiles of companies participating in the graphite market in 2021
Table 5. Dynamics of graphite production in India by union territories in 2017-2021, tons
Table 6. Graphite import structure by importing countries in 2021, units rev.
Table 7. Tenders for the purchase of graphite, for which contracts were concluded under Federal Law-44 in the period from 01.04.2021/31.03.2022/ to / /
Table 8. Average producer prices in the graphite market across the Union Territories in 2017-2021, thousand Rs./t
Table 9. Average consumer prices in the graphite market by states of India in 2022, thousand Rs./t
Table 10. Assessment of factors of investment attractiveness of the graphite market
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