Needle Coke Market Expected to Reach $5.7 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Needle Coke Market," The needle coke market size was valued at $2.3 billion in 2021, and is estimated to reach $5.7 billion by 2031, growing at a CAGR of 9.8% from 2022 to 2031.

Needle coke is used as a main material for the electrode in an electric steel furnace, which melts and refines steel scrap. Needle coke graphite is the best material for making lithium-ion battery anodes. Anodes made from synthetic graphite powder are extremely compatible with lithium-based cathodes. Calcined petroleum coke can be used in place of metallurgical coal, as a feedstock for coke oven batteries, as well as pulverized coal directly pumped into blast furnaces.

The growth of the global needle coke industry is majorly attributed to its wide applications in various industries, such as graphite electrodes, lithium-ion battery, special carbon material, rubber compounds, and others. In addition, rising demand for graphite electrodes to power electric arc furnaces for steel producing industries of needle coke, supported by different national industrial policies, is likely to drive the needle coke market growth during the forecast period. Needle coke is a high-quality petroleum coke that is widely used in the steel industry to make graphite electrodes for arc furnaces. Coal tar pitch, which is a by-product of coking metallurgical coal is used in blast furnace steelmaking to make coal-based needle coke.

The electrodes are also used to melt steel scrap, or scrap substitutes, in the case of electric arc furnace (EAF) steelmaking, or to maintain the temperature of molten steel in secondary steelmaking. Super premium grade needle coke is becoming more popular owing to its low sulphur content and remarkable intrinsic features, such as low puffing rate, low coefficient of thermal expansion, and big particle size, which allow for a 5% increase in productivity in steel recycling.  Also, surge in preference toward hybrid electric vehicles is driving the market growth during the forecast period.

Rapid adoption of hybrid electric cars due to the implementation of fuel measures by different regulatory organizations, such as the Environmental Protection Agency (EPA), is predicted to result in a rapid shift toward more eco-friendly fuels and energy sources, thereby propelling the demand for hybrid electric vehicles. The U.S. has directed the federal government to acquire 100% zero-emission vehicles (ZEVs) by 2035, with a goal of obtaining 100% zero-emission light-duty vehicles by 2027. The Indian government has announced plans to raise the use of electric vehicles to 30% of private automobiles, 80% of two and three wheelers, and 70% of commercial vehicles by 2030.

However, high production cost of needle coke is projected to hinder the expansion of the market. On the contrary, the needle coke market growth is likely to be propelled by changes in the business environment made by rapid technological improvements. Furthermore, surge in strategic partnerships is expected to create ample growth opportunities for market growth.

The needle coke market is segmented into type, application, and region. On the basis of type, the market is categorized into petroleum-based and coal-based. On the basis of application, the market is categorized into graphite electrodes, lithium-ion battery, special carbon material, rubber compounds, and others. The graphite electrodes segment dominated the global needle coke market in terms of revenue, in 2021. Graphite electrodes are the primary heating element for an electric arc furnace, which is employed in the steelmaking process, which involves melting scrap from old automobiles or appliances to make new steel. Petroleum-based needle coke is widely used to produce graphite electrodes. Region-wise, the market is studied across North America, Europe, Asia-Pacific, and LAMEA. The needle coke market share is analyzed across all significant regions and countries.

The major players operating in the global needle coke market include Asbury Carbons Inc., Baosteel Group, Essar Oil Ltd, GrafTech International Ltd, HEG Limited, Indian Oil Corporation, Mitsubishi Chemical Corporation, Mott Corporation, Nippon Steel Corporation, Petroleum Coke Industry, Phillips 66, Reliance Industries, Shell Global, Sumitomo Corporation, and Tokai Carbon Co., Ltd.

COVID-19 Analysis:

The COVID-19 pandemic has had a detrimental impact on the supply of graphite electrodes, as well as the import and export of needle coke. Graphite electrodes are the primary heating element of an electric arc furnace, which is a steelmaking process, in which scrap from old vehicles or appliances is melted to create new steel.

However, the pandemic coupled with the high volatility of crude oil prices has delayed many refinery projects across the globe, which has created increased demand for electric vehicles. According to International Energy Agency, electric car sales were 12% higher year-on-year in China in 2021. However in 2020, electric vehicle sales reached approximately 1.3 million in both, Europe and China, which translates into a share of electric cars in total sales of roughly 10% in Europe, and 5% in China. In the U.S., despite a lack of EV stimulus measures at the federal level, electric car sales were 4% higher in 2020 than  2019. Thus, the growing demand for electric vehicles globally is predicted to propel the demand for needle coke during the COVID-19 pandemic.

Key findings of the study

• By type, the petroleum based segment was the highest revenue contributor to the market in 2021.
• By application, the graphite electrodes segment was the highest revenue contributor to the market in 2021
• By region, Asia-Pacific was the highest revenue contributor to the market in 2021, growing with a CAGR of 9.4%
• China was the highest revenue contributor to the market in 2021, growing with a CAGR of 12.7%
• South Korea and India are expected to witness considerable CAGRs of 9.6% and 8.1%, respectively, during the forecast period.