Needle coke demand set to triple by 2035 as steel and battery buildouts accelerate

Global needle coke demand is projected to rise from 2.71 million metric tons in 2025 to 11.48 million metric tons by 2035, driven by electric arc furnace steelmaking and lithium-ion battery anode production. The market’s growth is being shaped by policy, capacity expansion and tighter material specs across steel and energy supply chains.

Why it matters: - Needle coke is moving from a niche refinery by-product to a core input for two fast-growing industrial shifts: electric arc furnace steel and battery anodes. - The market’s projected rise to 11.48 million metric tons by 2035 signals stronger demand for graphite electrodes and synthetic graphite supply chains. - The growth also raises stakes for refineries, calcination capacity and low-emission production.

What happened: - Market Research Future projected the global Needle Coke Market at 2.71 million metric tons in 2025, 3.18 million metric tons in 2026 and 11.48 million metric tons by 2035. - The forecast implies a 16.38% CAGR from 2026 to 2035. - The report ties the growth outlook to decarbonized steelmaking and lithium-ion battery manufacturing. - The source material identified a medium-concentration competitive landscape, with the top five producers holding an estimated 55% to 62% share. - Prominent companies cited include Phillips 66, CNPC Jinzhou Petrochemical, Mitsubishi Chemical, Indian Oil Corporation, JFE Chemical, Petrocokes Japan, GrafTech International, Baosteel Resources, C-Chem and Sinopec Maoming.

The details: - Electric arc furnace steel production reached 548.4 million tonnes in 2024, or 29.1% of global crude steel output, according to the World Steel Association. - The United States had the highest EAF penetration at 71.8% of steel output. - India, Iran and Egypt each exceeded 50% EAF share, while the European Union reached 44.4% in 2024. - S&P Global Market Intelligence expects EAF steel output to approach 800 million tonnes by 2035. - India is targeting 300 million tonnes of installed steelmaking capacity by 2030 under its National Steel Policy, up from about 220 million tonnes in FY 2025–26. - India’s Green Steel Initiative includes Tata Steel’s Rs 3,200 crore scrap-based EAF green steel plant at Ludhiana in 2025. - China sanctioned 28 new EAF furnace projects between 2023 and 2025 as part of a scrap-steel circular economy push. - China’s Ministry of Industry and Information Technology has targeted EAF-based capacity at 15% of crude steel production by end-2025 and more than 20% by 2028–2030. - Lithium-ion cell manufacturing capacity exceeded 7.2 TWh by late 2024. - Synthetic graphite anode specs for needle coke now appear in qualification protocols at CATL, LG Energy Solution and Samsung SDI. - Synthetic graphite anode plants require calcined petroleum needle coke with coefficient of thermal expansion below 1.0 × 10⁻⁶/°C. - The U.S. Inflation Reduction Act’s Section 45X tax credit gives a 10% production credit for domestically manufactured electrode active materials, including synthetic graphite anode materials. - The IRS finalized Section 45X regulations in October 2024. - The Joint Committee on Taxation projects $87.3 billion in total Advanced Manufacturing Production Credits by 2028. - U.S. anode-material capacity announcements have topped $1.2 billion since 2023. - Petroleum-based needle coke held about 90% of the market in 2025. - Coal-tar pitch-based needle coke is forecast to grow at a 14.2% CAGR through 2035. - Graphite electrodes accounted for about 67% of 2025 consumption. - Lithium-ion batteries are the fastest-growing application, at a 23.8% CAGR through 2035. - Other uses, including nuclear graphite and specialty carbon products, represented about $52 million in 2025 market value.

Between the lines: - The market is being pulled in two directions at once: steelmakers need more UHP electrode supply, while battery manufacturers are diverting premium-grade material into anode production. - That competition for feedstock can tighten availability and support pricing for producers that control refining, calcination and downstream processing. - Feedstock volatility remains a risk, with FCC decant oil spot prices swinging 34% during 2023–2024. - Long-term offtake contracts indexed to decant oil benchmarks can reduce volatility by about 40%, but smaller producers may struggle to secure them. - Environmental compliance is also raising barriers, with retrofit costs for scrubber and baghouse systems sometimes exceeding $40 million per facility. - Pilot-scale graphite recycling in Japan and Germany could eventually offset some virgin demand, but commercialization is unlikely to displace more than 5% of demand before 2032. - Digital monitoring is emerging as a margin lever, with AI-driven thermal imaging cutting off-spec production by up to 22% in early-adopter facilities.

What’s next: - India, Indonesia and Brazil together have a pipeline of more than 35 million tonnes of additional EAF steel capacity through 2032. - India’s Ministry of Steel said in May 2026 that total steel capacity stood at about 220 MTPA and is on track toward 300 MTPA by 2030. - EAF and induction arc furnace routes are expected to account for 35% to 40% of that expanded capacity. - The U.S. policy regime is likely to keep encouraging domestic anode-material investment through Section 45X incentives. - Producers with low-CTE UHP grades and verified emissions reductions are likely to win more supply contracts as buyers face Scope 3 disclosure pressure. - Near-term synthetic graphite demand should stay locked in through at least 2032, even if silicon-carbon anodes gain ground after 2030.

The bottom line: - Needle coke is becoming a strategic material for the steel transition and the battery supply chain, and demand is set to stay elevated for years as both sectors scale.