Data from GGII reveals that China's anode material shipments reached 1.91 million tons in the first half of 2026, marking a 48% year-on-year increase. The core driver of this growth is the explosive demand from the energy storage sector, with demand from the power battery segment also providing steady support.

Industry capacity utilization rose from 70% in 2025 to over 80% in the first half of 2026, with leading enterprises operating at full capacity.

Key Market Dynamics in H1 2026

The supply-demand dynamic has supported price increases for products. High-end energy storage-grade artificial graphite remains in short supply. By June 2026, its price had reached 20,000 to 22,000 yuan per ton, representing an increase of approximately 10% compared to the end of 2025.

Shortages in upstream raw materials like low-sulfur petroleum coke and high-grade needle coke are providing cost support, propelling the entire industry into an upward price cycle.

Capacity Expansion and Utilization Outlook

There is a notable time lag in new capacity coming online. GGII anticipates that from the second half of 2026 through 2027, effective new capacity for both finished anode products and graphitization will each be in the range of 1 to 1.5 million tons.

Industry capacity utilization is expected to climb to 90% or higher in the second half of 2026 and remain at a high level above 85% in 2027, indicating a persistently tight supply situation.

Graphitization Capacity Constraints

Graphitization capacity is gradually becoming constrained, with a tight match to finished product capacity. In the first half of 2026, China's capacity for finished artificial graphite anode products was 4.5 to 5 million tons, while the supporting graphitization capacity was only 4.2 to 4.6 million tons.

Intense competition for graphitization capacity has driven tolling prices up to 9,000-10,000 yuan per ton, leading companies to increasingly outsource this processing step.

Accelerated Validation of Anthracite-Based Anodes

Since 2026, battery and anode material companies have been actively developing anthracite-based anode technology. Its performance can already meet the requirements for mid-to-low-end energy storage applications.

However, due to high processing costs, it still lacks a clear cost advantage over petroleum coke-based anodes, necessitating further cost-reduction technological advancements.

GGII believes anthracite-based technology has the potential to become a mainstream raw material in the future. This is primarily because petroleum coke production is limited and tied to oil output.

As the lithium battery and anode markets continue to expand, petroleum coke will struggle to meet demand. Anthracite is cheaper and more abundant, better suiting the development trend of a multi-million-ton anode market.

The impact of anthracite technology includes: 1) Accelerating the substitution for petroleum coke and needle coke, alleviating raw material supply issues; 2) Potentially driving long-term (10+ years) anode costs below 10,000 yuan per ton; 3) Reducing the raw material scale advantage of leading anode firms due to anthracite's transparent pricing and ample supply, while favoring companies with superior purification technology due to its high processing costs.

Defined Industry Trends for 2027

Two clear trends are expected for the anode industry in 2027. First, industry supply will remain in a tight balance, with rising upstream graphitization tolling costs pushing anode prices up by roughly 10%.

Second, constraints on petroleum coke supply will accelerate the adoption and penetration of anthracite-based anode processes, with monthly shipments potentially exceeding 10,000 tons.