Conoco Phillips to Increase Needle Coke Production Capacity by 15-20%

Conoco Phillips, the largest producer of needle coke in the world, is on a capacity expansion drive, and plans to increase existing capacity by 15-20%. While, this would help in stabilizing raw material prices, needle coke’s increasing usage in Lithium Ion batteries (~15% of production) would remain a critical factor to look at.

Apart from graphite electrodes, needle coke is used to make lithium-ion batteries, used in phones and electric cars, further tightening availability for the steel sector. Petroleum coke, of which needle coke is a variety, is also widely used in the aluminum industry to manufacture the cathodes that are key to the smelting process.

Needle coke production is limited to a few suppliers, the biggest being U.S. oil major ConocoPhillips followed by Japan’s C-Chem Co Ltd. The needle coke industry is oligopolistic, with the top 5 major players accounting for over 80% of the world’s capacity. Most refineries don’t produce needle coke because it takes longer to make than more traditional forms of petroleum coke, analysts say.

Improvement in production level of Needle Coke is surely a boon to global Graphite Electrode manufacturers, but any increase in production could be easily offset by the rising demand from Lithium Ion battery makers.