Graphitization Toll Processing Prices See Broad Hikes; Industry Tight Balance to Persist

Structural supply-demand mismatch serves as the core driver behind this round of graphitization price hikes. Negative electrode production schedules have climbed month by month, and large & medium-sized negative electrode manufacturers are generally operating at full capacity. Integrated negative electrode producers continue to face tight in-house graphitization capacity, triggering a concentrated surge in demand for outsourced toll processing. High-quality independent graphitization toll processors are fully booked with orders and witnessing improved profitability, keeping the industry’s overall effective capacity in a tight balance.

According to Xinlu Information, artificial graphite anode materials now hold a 95% penetration rate in the market. China’s total effective graphitization capacity stands at roughly 4.5 million tonnes, of which only 3.98 million tonnes are scalable operational capacity. With sustained recovery in downstream demand, global total anode output is expected to exceed 4 million tonnes this year. Graphitization capacity across the sector is largely running at full load, with limited new supply coming online.

Against the backdrop of rising prices, profitability divergence among industry players has widened further. Negative electrode companies with low self-sufficiency rates of graphitization face mounting toll processing costs and shrinking profit margins. In contrast, leading integrated manufacturers with high self-sufficiency rates enjoy prominent cost advantages and reinforced competitive moats. From the perspective of industrial chain transmission, raw material costs for anodes remain elevated with upside potential. Coupled with battery makers’ persistent procurement strategy of “trading volume for lower prices”, the overall profit margin of the anode sector remains under pressure. Most manufacturers can only sustain operations through thin profit margins and higher sales volumes.

In the short term, the traditional peak demand season of “Golden September and Silver October” has kicked off, driving recovering demand from power battery and energy storage markets and further boosting anode production output. If upstream raw materials such as petroleum coke and needle coke keep climbing, anode producers will face heavier profit pressure. Price games between upstream and downstream segments may continue, leaving room for further increases in graphitization toll fees and finished anode prices.

Over the long run, China’s power battery and energy storage markets will maintain strong prosperity in 2027. The tight-balance pattern of insufficient graphitization capacity is likely to persist until the end of 2027. Future industry competition will center on independent and controllable capacity. Integrated negative electrode enterprises boasting high graphitization self-sufficiency rates and large-scale production capacity will retain the initiative and cost edge in industry development.