Needle Coke Market Forecast by 2030

29 Oct.,2022

 

600mm HP Graphite Electrode

Market Synopsis

The global needle coke market size was USD 2,293.5 Million in 2021 and is expected to register a revenue CAGR of 8.7% during the forecast period. Increasing usage in production of graphite electrodes for steel industry, especially in emerging countries, coupled with high demand for graphite batteries are some key factors driving market revenue growth. Benefits such as low porosity, low thermal expansion coefficient, low sulfur content, high conductivity, low metal content, and easy graphitization has led to high demand from various end-use industries such as aerospace & defense, manufacturing, and semiconductors, among others. Graphitized products exhibit good chemical stability, high thermal conductivity, high tensile strength at variable temperatures, corrosion resistance, as well as high electrochemical performance, which is essential in manufacturing of ultra-high power graphite electrode and artificial graphite cathode materials.

Rising demand for graphite electrodes to power Electric-Arc Furnace (EAF) for steelmaking and for new energy vehicles, which are downstream industries of needle coke and are supported by various national industrial policies as well, is a major factor expected to boost revenue growth of the market over the forecast period. EAF has significantly increased steel production in developed countries across Europe and North America owing to high availability of scrap metal. EAF accounts for over 60% of steel production in countries such as India and over 90% of steel production in the Middle East region. Rising adoption of electric vehicles to reduce carbon emissions and air pollution, in addition to increasing focus on carbon peak and carbon neutrality, have significantly supporting demand for needle coke. On 21 September 2021, China announced commitment toward green and low-carbon economy by peaking carbon emissions before 2030, and achieving carbon neutrality before 2060. China has also offered increased assistance to countries in developing green and low-carbon energy, was focused on saving energy, reducing fossil fuel output, and not building new coal-fired power projects abroad.

Increase in demand for electric and hybrid vehicles is boosting demand for lithium-ion (Li-ion) batteries. Rapid adoption of hybrid-electric vehicles owing to implementation of measures to reduce carbon emissions by various regulatory bodies such as the U.S. Environmental Protection Agency (EPA) is expected to result in rapid shift towards more eco-friendly fuels and energy sources and drive revenue growth of the market. On 8 December 2021, an executive order was signed in the U.S. directing the federal government to procure 100% Zero-Emission Vehicles (ZEVs) by 2035, which also includes acquiring of 100% zero-emission light-duty vehicles by 2027, for clean energy economy. Similarly, on 8 October 2021, the Indian government announced steps to increase adoption of Electric Vehicles (EVs) to make up 30% of private cares, 80% for two-and three- wheelers, and 70% for commercial vehicles by 2030, for decarburization in the transport sector.

In addition, rapid demand for lithium-ion batteries for EVs and other devices has been resulting in a number of major hurdles in countries across the globe. Though new needle coke capacity to enter the market shortly is expected to provide some amount of respite to shortfall or increasing cost, the planned supply growth far outweighs the projected growth in demand. This is also resulting in considerations among a number of refiners to convert cokers to enable production of needle coke in order to leverage opportunities and cater to growing unmet needs in the global market.

Furthermore, rising preference for natural graphite electrodes over synthetic products in lithium-ion batteries is expected to drive steady demand for needle coke during the forecast period. Increasing use of smartphones, PCs, and various wearable devices, and need to replace batteries from time to time, or purchase new devices are expected to ramp-up demand for needle coke.

However, volatility in global natural gas and crude oil prices owing to fluctuations in demand and supply as well as potential shortage of petroleum-derived needle coke as petroleum prices continue to rise is expected to restrain revenue growth of the market. Moreover, cost of needle coke is driven even higher owing to required filtration to remove a significant portion of ash content from decant oil. In addition, the Russia-Ukraine war has been having wide-ranging impacts across various industries and sectors since Russia was sanctioned.

Implementation of lockdowns, owing to COVID-19, disrupted the manufacturing capacity of automotive and steel producers as it led to slowdown production and sales of electric vehicles, in addition to continued supply chain disruption, which meant that the lithium-ion demand was curtailed. Nevertheless, several lithium-ion manufacturers shifted production to meet emergency demand for vital ICU equipment such as ventilators. Ukraine-Russia conflict has led to implementation of stringent governmental sanctions, which has caused a surge in international crude oil prices, rising by over 9% to break through USD 100 for the first time since 2014. Trade costs are expected to rise owing to sanctions, export restrictions, higher energy costs, and transport disruptions, thereby further affecting many economies with long-term consequences. Moreover, production of semiconductors depend on neon, which is supplied by Ukraine, which also provides various low-tech products to the European automobile value chain. However, prolonged recession and disruption in supply-demand chain is expected to harm the recovery of many industries, especially automobile manufacturing, after COVID-19 left its mark and industries are still limping back to some sort of normalcy.

Production Methods:

Needle coke can be produced by various methods such as delayed coking and subsequent calcination method, method for microstructure assessment of petroleum needle coke in plane-polarized light, SEM method for analyzing surface morphology of petroleum needle coke, XRD method for analyzing the fine structure of the petroleum needle coke, dilatometric investigations of the linear thermal expansion coefficient of needle coke, XRF analysis of sulfur and microelement composition of petroleum needle coke, and dynamic viscosity.

Production of oil-based needle coke is through delayed coking process, which includes three stages: raw material pretreatment, delayed coking, and calcination. Coking process is a key stage in the production line of needle coke. The coking temperature is a critical factor that affects the quality of needle coke. If calcination technology is relatively mature, then production facilities only need to select appropriate temperature and calcination method. Delayed coking offers a potential means of converting a variety of materials to valuable motor fuels, often while eliminating a low-value or unmarketable refinery stream or eliminating a stream that not only is environmentally unfriendly, but also involves a disposal cost. Another advantage of delayed coking is that it not only complements other, more capital intensive, bottom-of-the-barrel conversion technologies, but also works very well as the primary upgrader in the refinery. Delayed coking is mostly used to produce needle coke, a specialty product, if appropriate feedstock, design techniques, and operating parameters are applied. The worldwide trend of processing heavy feedstock in the delayed cokers for getting maximum yield of liquid products has led to the production of fuel grade coke that contains large amounts of sulphur and metals.

Production Capacity:

From around second place among the largest importers of needle coke, China’s imports are expected to steadily decline owing to increase in domestic production capacity. For instance, CNPC Jinzhou Company, Shandong Yida New Material and Shandong Jingyang Tech expanded production of coal-based needle coke in 2019, with planned capacity of 100,000, 70,000, and 70,000 tons respectively. In 2020, Shanxi Fuma Carbon Material and Ningxia Baichuan new material were new entrants in the petroleum-based needle coke space, with capacity of 40,000 and 50,000 tons each. Similarly, SinoPec Maoming Company, Sinopec Jinling Company, and Liaoning Baolai Bio-energy are new entrants in the production of coal-based needle coke, with capacity of 100,000, 100,000, and 120,000 tons each in 2020. However, with all facilities claiming to produce needle coke, there is a high probability that several plants are producing lower quality products as compared to the rest of the world. It also explains the country’s continued dependence on imported Ultra-High Power (UHP) graphite electrodes for steel mills.

Regulations:            

International Maritime Organization (IMO) implemented new regulation from 1 January 2020, for 0.50% global sulfur cap for marine fuels. Under the new rule, prices rose as more low-sulfur fuel is diverted to the bunker sector, as shippers strive to comply with the regulatory changes. Needle coke producers must contend with increased competition for feedstock or invest in equipment to allow the use of higher sulfur fuel oils. Either way, IMO 2020 increased the cost of needle coke.

Product Type Insights:

Petroleum-based needle coke segment accounted for significantly large revenue share in the global needle coke market in 2021

On the basis of product type, the needle coke market is segmented into coal-based needle coke and petroleum-based needle coke. Petroleum-based needle coke segment accounted for larger revenue share in 2021. Increasing production of synthetic graphite electrodes for Electric Arc Furnaces (EAFs) in the steel industry and lithium-ion battery anode material are key factors driving demand for petroleum-based needle coke.

Coal-based needle coke is produced from coal tar, which is a by-product during coke production. Refined coal tar pitch is considered a promising material for production of needle coke owing to excellent physical–chemical properties. Coal-based needle coke has an inherent advantage over petroleum coke as it is more aromatic and has fewer side effects. With proper industrial treatment, needle coke from coal-based feedstock could be superior to that from petroleum-based feedstock.

Grade Insights:

Super-premium grade segment accounted for a significantly robust revenue share in the global needle coke market in 2021

On the basis of grade, the needle coke market is segmented into intermediate grade, premium grade, and super-premium grade. Super-premium grade segment accounted for largest revenue share in 2021. Super-premium grade needle coke is being increasingly adopted owing to low sulfur content and exceptional inherent properties such as low puffing rate, low coefficient of thermal expansion, and larger particle size, which allow 5% higher productivity in steel recycling.

Application Insights:

Graphite electrode segment accounted for a robust revenue share in the global needle coke market in 2021

On the basis of application, the needle coke market is segmented into graphite electrodes, silicon metal and ferroalloys, lithium-ion anode, carbon black, rubber compounds, and others. Graphite electrodes segment accounted for largest revenue share in 2021. Graphite has various properties such as high thermal conductivity and is resistant to heat. It is used under harsh conditions, such as in high-temperature atmospheres, and is therefore desired to have low thermal expansion coefficients, which makes it ideal for usage as a main heating element in electric arc furnaces.

Carbon black segment accounted for a significantly large revenue share in 2021, owing to increasing use in manufacture of products such as tires, rubber and plastic products, printing inks, and coatings. Though primarily used for strengthening rubber in tires, carbon black can also serve as a pigment, UV stabilizer, and conductive or insulating agent in a variety of rubber, plastic, ink, and coating applications.

End-use Insights:

Aluminum and steel industry segment revenue is projected to increase at a steady rate during the forecast period

On the basis of end-use, the needle coke market is segmented into aluminum and steel industry, aerospace & defense, automotive, semiconductors, and others. Advantages associated with steel such as superior durability, corrosion resistance, and ability to withstand extreme temperatures is driving demand in the semiconductor industry, and rising demand for steel is driving demand for needle coke.

Demand of needle coke from the automotive industry is expected to register a significantly rapid growth rate in the coming years. Needle coke is used as a raw material for the production of lithium-ion anodes owing to benefits such as excellent electrical conductivity and longer cycle life. Demand for petroleum needle coke for lithium‑ion batteries has also been increasing rapidly. While other cathode materials such as lithium cobalt and nickel are also used in huge quantities, graphite remains the largest input material by volume into lithium-ion batteries.

Regional Insights:

North America accounted for a relatively larger revenue share than other regional markets in the global needle coke market in 2021

Region-wise, the global needle coke market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Needle coke market in Asia Pacific accounted for largest revenue share in 2021. Growing automotive sector along with rapid expansion in the steel industry in countries in the region has also increased demand for aluminum for various vehicle components and parts. Steel is widely used in building and construction sector owing to durability, ductility, strength, and resistance, and production is also increasing in Asia Pacific to cater to rising demand. High consumption of needle coke in China is further expected to drive market growth.

China’s steel production has increased at a rapid pace owing to rapid economic growth and industrialization and urbanization. High investments in infrastructure, machinery, and building is expected to continue to support market growth going ahead. Needle coke is used in the production of graphite electrode for steel industry. Moreover, Asia Pacific is a major consumer for semiconductors, accounting for over 50% of the global consumption, owing to it being a major electronics hub along with expanding automotive sector. These are other key factors expected to continue to drive revenue growth of the Asia Pacific needle coke market over the forecast period.

Market in North America accounted for a significantly robust revenue share in 2021 owing to rapid growth of various end-use industries. Rise in demand for electric vehicles and steel and metals in building and construction sector is expected to support market revenue growth. The search for consistent quality, high purity needle cokes may broaden the scope of potential precursors in line with the trend towards cleaner fuel technology, and these factors are likely to support revenue growth of the North America needle coke market over the forecast period.

Major Companies and Competitive Landscape

The global needle coke market is fairly fragmented, with a number of large and medium-sized players accounting for majority market revenue. Major players are deploying various strategies, entering into mergers & acquisitions, strategic agreements & contracts, developing, testing, and introducing more effective solutions. Some major companies included in the global needle coke market report are:

  • Asbury Carbons
  • Baosteel Group Co.,
  • GrafTech International
  • Indian Oil Corporation Ltd.
  • Mitsubishi Chemical Holdings Corporation
  • Nippon Steel Chemical & Material Co. Ltd.
  • Phillips 66 Company
  • Posco Chemical
  • Sumitomo Corporation
  • China National Petroleum Corporation

Strategic Development

  • On 4 July 2021, Imam Khomeini Shazand Oil Refinery and Research Institute of Petroleum Industry signed a deal for production of needle coke, which will make Iran self-sufficient in production of steel. Pilot plant has been built at RIPI and the unit launched in the refinery.
  • On 2 September 2020, IndianOil board approved the installation of Grassroot Needle Coker Unit at Paradip Refinery. The proposed unit will include Calcined Needle Coke (CNC) with production capacity of 56 kilo-tons per annum, and will utilize IndianOil in-house technology Research & Development (R&D). Estimated cost of project is USD 163.5 Million. The proposed unit is expected to enhance gross margin of the refinery and increase the capability of IndianOil for supplying indigenously licensed technology.

Scope of Research

PARAMETERS DETAILS The market size value in 2021 USD 2,293.5 Million CAGR (2022–2030) 8.7% The Revenue forecast in 2030 USD 4,833.5 Million Base year for estimation 2021 Historical data 2019–2020 Forecast period 2022–2030 Quantitative units Revenue in USD Million, Volume in Kilo Tons and CAGR in % from 2022 to 2030 Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Product type, grade, application, end-use, Region

Regional scope

North America; Europe; Asia-Pacific; Latin America; Middle East & Africa

Country scope

U.S., Canada, Mexico, Germany, U.K., France, Spain, BENELUX, Rest of Europe, China, India, Japan, South Korea, Rest of APAC, Brazil, Rest of LATAM, Saudi Arabia, UAE, Israel, and Rest of MEA

Key companies profiled

Asbury Carbons, Baosteel Group Co., GrafTech International, Indian Oil Corporation Ltd., Mitsubishi Chemical Holdings Corporation, Nippon Steel Chemical & Material Co. Ltd., Phillips 66 Company, Posco Chemical, Sumitomo Corporation, and China National Petroleum Corporation

Customization scope

10 hrs of free customization and expert consultation

Segments Covered in Report

Emergen Research has segmented the global needle coke market on the basis of product type, grade, application, end-use, and region:

  • Product Type Outlook (Revenue, USD Million, Volume, Kilotons; 2019-2030)

    • Coal-based Needle Coke
    • Petroleum-Based Needle Coke
      1. Shaft Calciner
      2. Rotary Kiln
  • Grade Outlook (Revenue, USD Million, Volume, Kilotons; 2019-2030)

    • Intermediate Grade
    • Premium Grade
    • Super-Premium Grade
  • Application Outlook (Revenue, USD Million, Volume, Kilotons; 2019-2030)

    • Graphite Electrodes
    • Silicon Metal and Ferroalloys
    • Lithium-ion Anode
    • Carbon Black
    • Rubber Compounds
    • Others
  • End-Use Outlook (Revenue, USD Million, Volume, Kilotons; 2019-2030)

    • Aluminum and steel industry
    • Aerospace & defense
    • Automotive
    • Semiconductor
    • Others
  • Regional Outlook (Revenue, USD Million, Volume, Kilotons; 2019-2030)

    • North America
      1. U.S.
      2. Canada
      3. Mexico
    • Europe
      1. Germany
      2. U.K.
      3. France
      4. Spain
      5. BENELUX
      6. Rest of Europe
    • Asia Pacific
      1. China
      2. India
      3. Japan
      4. South Korea
      5. Rest of APAC
    • Latin America
      1. Brazil
      2. Rest of LATAM
    • Middle East & Africa
      1. Saudi Arabia
      2. UAE
      3. Israel
      4. Rest Of MEA