Unlocking cost-competitive synthetic graphite in Saudi Arabia

Synthetic graphite (SG), rather than natural graphite, constitutes the predominant proportion of lithium-ion battery anode market, and nearly 96% of the global battery anode capacity is concentrated in China. Western concerns over China’s dominance in SG, alongside China’s growing feedstock shortage over the longer term, is propelling the Kingdom of Saudi Arabia (KSA) to the forefront as an alternative supply source. We briefly assess the future demand–supply landscape and develop a bottom-up SG cost framework for parallel comparison between KSA and China, systematically evaluating cost responses to multiple drivers. China’s SG supply is capped at 3.8 million tons (Mt), leaving a potential 2 Mt gap by the 2030s. Assuming a moderate return rate on capital expenditure, KSA could profitably fill this gap — slightly below China’s profitability but offering a >45% cost advantage over the United States. Considering the superior profitability of high-grade SG compared to needle coke feedstock, a practical approach for KSA would be to focus on high-grade SG production as a start and integrate this with China's value chain, thereby enhancing economic competitiveness relative to SG production in most other global markets.