The Graphite industry, like many other sectors, had been experiencing a consistent updraft caused by the continued surge of Chinese steel, due primarily to graphite being a key raw material in electrodes and refractories.

And, like many other sectors, they are seemingly rushing headlong into a crisis caused by the contraction of the Chinese market. The primary lifeblood of the synthetic graphite industry, electrodes for electric arc furnaces (EAFs), has been hit hard. 2014 saw a six percent drop in EAF steel production, and 2015 continued that downward trend.

Natural graphite has not fared much better, with demand for refractories, by far the most significant market for natural graphite, falling every year since 2011. The slide is projected to continue all the way up till 2020.

There’s a silver lining hidden among all the doom and gloom though and it comes in the very portable form of lithium-ion batteries, more specifically, in the anodes of lithium-ion batteries.

China has become somewhat of a breeding ground for electric vehicles (EVs) and plug-in electric vehicles. In fact, 2015 sales accounted for more than half of all EV sales in China’s history. Much of this demand can be attributed to the Chinese governments push to put 5 million new energy vehicles on the road by 2020, through a variety of measures from EV subsidies and exempting Evs from rush hour restrictions.

The push towards EVs isn’t restricted to just China alone, visionary manufacturers such as Tesla have done incredible things to up the demand of EVs, creating sleek, battery efficient cars at surprisingly low prices. All this, in addition to growing awareness of the environmental deficits caused by traditional cars have seen a surge in demand for EVs, and with it, a potential surge for graphite.

Growth in the graphite industry, both synthetic and natural, depends heavily on this rise in the coming years, as well as the adoption of new sectors requiring graphite that might come up in the near future.