Graphite Market Trends: H1 2026 Review and Forecast

The anti-dumping case that didn’t stick

The clearest test of Western resolve came via trade policy. US graphite producers filed anti-dumping and countervailing duty petitions in December 2024, and the early rulings favored the domestic industry: preliminary countervailing duties near 67 percent, followed by preliminary anti-dumping duties around 94 percent in July 2025.

Combined with existing tariffs, the total import burden on Chinese anode material briefly approached 200 percent.

China adapted almost immediately.

Producers, including major anode maker BTR, rerouted synthetic and natural graphite shipments through Indonesia rather than shipping directly from China, largely sidestepping the duties before they could bite.

Then, in March 2026, the US International Trade Commission ruled against the domestic industry altogether, dismissing the preliminary duties. The tariff burden on Chinese anodes has since settled at around 40 percent.

Bennett contrasted the outcome with anti-dumping wins in other sectors, such as steel, where duties have exceeded 600 percent.

The difference, she said, is that petitioners must prove injury to an existing domestic industry, a tall order when that industry barely exists yet.

“This anti-dumping case may not have been the best strategy,” Bennett noted, adding that “the industry is not fully in place at this point,” even though some protective measures are clearly needed.

Indonesia emerges as the new middleman

With the direct China-to-US route now complicated by trade friction, Indonesia has rapidly become the preferred conduit.

Indonesian anode-material imports were essentially zero in 2024; by last year, the country was importing meaningful volumes of both natural graphite feedstock and the GPC precursor material used to make synthetic graphite.

Fastmarkets expects Indonesia to become the largest single supplier of anode material to the US in the coming years, with pricing for Indonesian-origin material tracking closely with Chinese pricing.

Notably, Bennett said, Europe has not seen a comparable shift in sourcing patterns.

Synthetic keeps winning, and the Middle East adds a twist

The natural-versus-synthetic balance has also shifted decisively. At the start of the decade, anode demand was split roughly evenly between the two.

A 2022 supply crunch prompted Chinese producers to build out enormous synthetic graphite and graphitization capacity, erasing the cost advantage natural graphite once held.

Today the split sits closer to 85 percent synthetic to 15 percent natural, globally and in China specifically, with only a gradual and modest shift toward natural expected in ex-China markets like Europe, the US, Japan and South Korea.

The Middle East conflict added an unexpected wrinkle. Rising oil and refined-product prices pushed up costs for needle coke and GPC, the feedstocks behind synthetic graphite, and synthetic price premiums did tick higher.

But the anticipated knock-on benefit for natural graphite pricing never materialized, natural prices in China kept falling anyway.

“We had wondered, and certainly hoped” that the disruption might spark broader price improvement and investment, Bennett said, but “there really has not been that knock-on effect we had anticipated.”

She added that graphite’s anode side has largely been insulated from the kind of sulfuric-acid-driven cost shock hitting cathode materials like cobalt and nickel: “I’m not too concerned for graphite from that sulfuric acid component.”

Hear more from Bennett on the need for more midstream expansion and what’s next for the anode material market.

Demand holds up even as investment lags

Global anode demand growth is forecast at roughly 12 percent annually over the next decade, underpinned less by a slowing EV market and increasingly by energy storage.

China still consumes 60 to 65 percent of its own anode output domestically, exporting the remaining 35 to 40 percent, with Europe and then the US as the largest external markets.

Bennett doesn’t expect demand to evaporate even with EV softness: “I think demand will be there, and I think because there is still the ability to work with that Chinese material at this stage, that will provide sort of a bridge for the industry.”

What’s harder to find is investment.

“Who wants to invest in a market with declining prices, or an extended period of low prices?” Bennett said, when asked whether the industry is funding enough future supply. “Not really.”

Policy helping, but not always where it’s needed

Washington’s response has been substantial, if unevenly targeted.

The 45X manufacturing tax credit was preserved under last year’s One Big Beautiful Bill Act, but new prohibited-foreign-entity (PFE) content rules were layered on top, calculated by cost share.

Because anode material represents only about 7 percent of total cell cost versus roughly 60 percent for cathode material, Bennett argues manufacturers face far less financial pressure to diversify anode supply than cathode supply — a dynamic she calls “a real consideration” that could let Chinese-linked anode material keep flowing largely unpenalized for years.

One notable carve-out: joint ventures with Chinese ownership stakes below 25 percent still qualify for manufacturing credits, which Bennett sees as “a huge opportunity” for US and Chinese firms to collaborate rather than compete from scratch.

Separately, a Section 232 investigation into processed critical minerals, delayed by last fall’s government shutdown, concluded in January with the Department of Commerce acknowledging the national-security risk of relying on a “foreign adversary” for processing, though it stopped short of imposing tariffs, opting instead to pursue diplomatic solutions.

Permitting reforms like Fast 41 have sped up mining projects, Bennett said, but haven’t done much for graphite specifically.

She pointed to Syrah Resources (ASX:SYR,OTCPL:SYAAF)‘ Vidalia plant — arguably the closest thing the US has to commercial-scale domestic anode production — which has spent years still working toward Tesla qualification, as a reminder that processing capacity, not mining, is the real bottleneck.

“That’s where we have a real shortfall,” she said, “because there are plenty of friendly mining countries to source from. It’s really that processing capacity where China has a real chokehold on the market.”

Heading into the second half of 2026, graphite remains caught between depressed pricing, an entrenched Chinese supply chain, and policy tools that so far favor cathode diversification over anode diversification.

Bennett believes the opportunity for the West is real, but narrowing.

“It’s a matter of which companies are going to reach out, grab that opportunity, and take it forward,” she said — though, as she put it regarding the pace of government-private collaboration needed to close the gap, “it might need to be faster than that.”