Synthetic and Natural Graphite

The relative applications and fundamentals of th th ti d t l hit k tthe synthetic and natural graphite markets

Tom Burkett – Vice President GMS – SGL GroupIndustrial Minerals Graphite & Graphene Conference

New York, NY November 25-26. 2013

SGL Group Overview

SGL Carbon and the relative applications and fundamentals of the synthetic andSGL Carbon and the relative applications and fundamentals of the synthetic and natural graphite markets

What are the projections for growth in this market? p j g

Can the synthetic graphite market benefit from interest in new carbon products?

What synthetic graphite producers and natural graphite consumers can do to offset the damaging effects of volatile raw material prices - coke and natural flake?

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SGL Group - The Carbon Company is one of the world’s largest manufacturers of carbon-based products

SGL today

• Comprehensive portfolio ranging from carbon and graphite products to carboncarbon and graphite products to carbon fibers and composites

• 45 production sites worldwide

• Service network covering more than 100 countries

• Sales of € ~1 7 bn in 2012• Sales of € 1.7 bn in 2012

• Head office in Wiesbaden/Germany

• Approx 6 700 employees worldwide• Approx. 6,700 employees worldwide

• Listed on Deutsche Bourse’s SDAX

• Established in 1878 = 135 years old

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• Established in 1878 = 135 years old

SGL Group has a strong global footprint with 45 production sites

SGL Group worldwide

Production sites Performance Products Asia 28%

RoW* 8%

Sales by region

Graphite Materials & Systems Carbon Fibers & Composites

North America

23%

Germany18%

Rest of Europe

23%23%

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* RoW = Latin America, Africa, Australia

Broad Base

Core competencies

Comprehensive portfolio

• High temperature technology

• Know-how in:

Global presence

– Materials– Engineering– Applications

• Coarse-grain graphite

• Fine-grain graphite

• Expanded natural graphite • Approx 6 500 people worldwidep g p

• Carbon fibers and composites• Approx. 6,500 people worldwide

• 45 production sites

• Global network

• Near to our customers

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Fundamentals – Why Graphite ?

In the following slides we’ll look at:In the following slides we ll look at:

The fundamentals of Graphite

The Applications of Graphite

The Prospects of Growth for GraphiteThe Prospects of Growth for Graphite

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Carbon and Graphite growth is derived fromMarket Needs where other materials fail

Main properties carbon and graphite materials

M h i l

Thermal shock

Electricallyand Thermally

Mechanical strength

shock resistance

and Thermally Conductive

Carbon & Graphite materials

Ultra HighPurity

Corrosion resistance

materials

Machinability

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The competitive advantages of carbon

… or stronger and stifferNo other material is lighter …Specificstrength

(k )

500

400

Density(kg/l)

7,9

(km)

200

100

300

AramidFiber

SiC

Al-alloys

Glass Fiber

2,71,6

Specific stiffness (100 km)

Other ceramics would break … … or fail at temperatures > 1.500 °C

100 20000

Al-alloysSteel

Steel Aluminium CFRP

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Synthetic graphite manufacturing is complex and requires multiple steps for a total four to six months production time

Manufacturing process of synthetic graphite

Coke & graphite Binder pitch

Shaping

MixingGrinding

p gExtruding, vibration / die

molding, isostatic pressing

CarbonizingPitch i ti

4-5 months

Carbonizing

Graphitizing

impregnating

FinishingMachining, purifying,

SiC coating2-4

weeks

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The unique properties of natural graphite are captured in expanded graphite foils

Intercalation agentNatural graphite flakes

Manufacturing process of expanded graphite

gg

Graphite salt

Thermal expansion1,000°C

3-5 days

Compacting

Sheets FoilsImpregnated

3-5days

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Sheets

Fundamental long-term growth drivers for our businesses

Key challenges Changed economic i t

Energy / raw t i l il bilit

Climatehey c a e ges environment materials availabilitychange

SGL Group approach “Towards an ecologically sensitive world”

Sustainable solutions

Energyefficiency

Lightweight

Alternativeenergies Sustainabilitysolutions efficiency weightenergies

Carbon contributes to all four solutions

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Best Solutions: Best in class products, services and ideas to satisfy current and future needs of our customers

Iron and steel Non-ferrous metals (e.g. aluminium)

Semiconductorsolar and LED( g )

• High-performance graphite electrodes

• Carbon and graphite cathodes in customized d i f i

• High-purity fine-grain graphite for polysilicon

d t l• Carbon and graphite lining materials for blast furnaces

designs for primary aluminum

• Fine-grain graphite for continuous casting

and monocrystal growing

• Coated graphite platters and susceptors for LED and Epitaxy

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for LED and Epitaxy

Best Solutions: Best in class products, services and ideas to satisfy current and future needs of our customers

Automotive ChemicalsMechanical engineering

High temperature technologyg g gy

• Carbon Fiber JV with BMW & Mitsubishi

• High Temp Corrosion Resistant Sealing &

• CFRP light weight components

• Graphite heaters and insulation materialBMW & Mitsubishi

• Cylinder head gaskets• Carbon ceramic brake

discs• Pump parts made of

Resistant Sealing & Gasket materials

• Thermal decomposition units

• Multi-tube heat

components• Fine-grain graphite for

electrical discharge machining

insulation material• C/C charging systems

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Pump parts made of carbon and graphite exchangers

Best Solutions: Best in class products, services and ideas to satisfy current and future needs of our customers

Energy and environ-mental technology Aerospace High performance

sports Automotivegy p

• Carbon fibers for windpower plantsC ld t t

• Primary structural CFRP componentsC b fib f

• Carbon fiber fabrics and prepregs for high-performance sports

• Carbon fiber for innovative automotive manufacturing• Cold storage systems

for truck air conditioning• Graphite for solar wafer

production and energy storage

• Carbon fibers for aircraft brakes

• C/SiC for satellite mirror support

performance sports• C/C-brake discs for

Formula 1 racing

manufacturing processes

• Fuel cells – automotive & stationary

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storage

New Markets and Materials:Products in their infancy with Bright Futures

Carbon Nanotubes 2Graphenes 1 Pyrolytic Graphite Sheet 3

• Application and Potential Applications in:• ElectronicsElectronics• Li-ion Batteries• Electrical and Thermal Storage• Medical• Construction• Automotive• Chemical and H2O Purification

• It’s not a question of IF; but WHEN

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Photo Sources: 1-Hitco/SGL; 2- The Guardian; 3-Panasonic Corp

Raw Materials

In the following slides we’ll look at:In the following slides we ll look at:

Natural Graphite as a Raw Material and our view of the market fundamentals

Coke as a Raw Material and our view of the market fundamentals

SGL’s Current view of these two marketsSGL’s Current view of these two markets

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Natural Graphite as a Raw Material - Market Drivers

• Small global business, acts like a commodity

• Seasonal influence• Seasonal influence

• Sovereign influence

• Family ownership = different profit motives

• Natural ( from the ground ) variation driving different economics

• Base industries – Refractories, Steel, Expanded Graphite

N M k t t t Li i h• New Market entrants – Li-ion, graphenes

• Purification technology & environment

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The Scarcity of Natural Graphite

Total Mine Extraction

Typical Run of Mine Flakeyp3 % - 8%

Typical Large Flake (80-30 Mesh)approx 30 40%approx 30-40%

1000 Mt Mined could equal

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9 – 32 Mt of Large usable flake

23 %240%

Natural Graphite Flake Pricing Index ( 2010 ‐ 2014 )2010 = 100%

210%

198%

234%

227% 228%

220%

240%

175%170%

184% 182%

183%

168%160%

180%

200%

134%

152%

141%

167% 168%

140%

160%

100%100%100%100%

120%

2010 2011 2012 2013 2014

NGLow Purity (97%) NGMedium Purity (99%) NGHigh Purity (99 95%) NGUltra High Purity (99 98%)

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NG Low Purity (97%) NG Medium Purity (99%) NG High Purity (99.95%) NG Ultra High Purity (99.98%)

Coke as a Raw Material - Market Drivers

• Global Market Drivers – Steel, Aluminum and Power

• Global Oil and Coal Economics

• Environmental drivers– New Pitch regulations– Coal for Electric Generation– Coke Battery Declinesy

• Capex constraints at Refineries that change availability

• Competition among all grades of coke…– Fuel grade, Met Coke, Anode grade, Pitch Coke, Needle Coke

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226%230%

240%

Coke prices for Synthetic Graphite2008 = 100

175%

209%

180%

190%

200%

210%

220%

152%

142%

128%

164%

148%

126%

144%

134%

148%

130%

140%

150%

160%

170%

94%

82%

110%

100%100%100%

110% 107% 105%

80%

90%

100%

110%

120%

130%

56%

64%

50%

60%

70%

80%

2008 2009 2010 2011 2012 2013

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Petroleum Anode Petroleum Needle Pitch (Isotropic) Pitch (Semi‐Isotropic)

How we manage the raw materials pricing dynamics

• Where possible pass through cost increases

• Develop new technologies that allow us to use lower cost raw materials to produce higher value-add products.

• Develop technologies to Blend raw materials

• Improve Yields through the process technology improvements

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SGL’s position on Coke and Natural Graphite

• High Purity NG and Coke are critical to our Success

• There is no shortage of either NG or Coke in the worldThere is no shortage of either NG or Coke in the world

• SGL does Not wish to become a Miner, we plan to maintain flexibility as a Consumer

• There is economical room for 3-5 more mines to open on a global basis• This assumes a reasonable growth rate for Li-ion Batteries

• Graphite Anode Material for Li-ion batteries will remain a mix of synthetic and natural for the foreseeable future

• Shift in Needle Coke market ( GTI and Chinese producers) should provide more favorable market conditions

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Summary

New Applications

Li-ion Batteries, LEDs, New Batteries, Solar, Electronics, etc…Li ion Batteries, LEDs, New Batteries, Solar, Electronics, etc…Will drive graphite demand, both Natural and Synthetic

New Materials such as Graphenes and NanotubesNew Materials such as Graphenes and NanotubesWill come forward over time to develop new industries

Virtually all technologies require higher purity levels improved/increased consistencyVirtually all technologies require higher purity levels, improved/increased consistency

Coating Technology open doors for growth of Carbon and Graphites

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Th k f tt tiThank you for your attention

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