Patersons said equities markets were struggling through a phase where even gold had lost some of its lustre resulting in investors turning to graphite in search of financial gain.
The firm said the attractions of the commodity were its scarcity, its unique physical and chemical properties and its growing importance in technology and green energy applications.
"It is the production of higher purity natural graphite and the discovery of grapheme that is really creating excitement," Patersons analyst Matthew Trivett said.
Graphite is often compared to other specialty metals such as uranium, lithium and rare earths and although China is a dominant player in the graphite market, Trivett said the Asian powerhouse's supply would not be the main risk to future prices.
The real kick, according the stockbroking firm would be the market outside of China being smaller than initially assumed.
"However, we see the diversity of uses for graphite and the potential of natural graphite to be used as a substitute for the significant larger synthetic graphite market at reducing this risk," Trivett said.
Current prices were found to provide enough incentive for new mines to be brought into production however the graphite market was deemed insufficient to accommodate all the new projects being developed.
"The remarkable run up in graphite prices since China placed a 20% export tax on the commodity has prompted a rush of exploration companies to acquire graphite properties or dust off old geology reports," Trivett said.
Like the rapid response to spikes in the other specialty metals, Trivett said the graphite space would "fill with many pretenders and a few contenders."
Patersons said South Australian-based Archer Exploration, Lamboo Resources and Mozambique-focused explorer Syrah Resources were the most interesting graphite stocks.
"Archer is attractive due to its strong cash position and initial metallurgical work completed," Trivett said.
"Initial indications imply Lamboo has a very large resource at its McIntosh deposit in the East Kimberly of Western Australia with over 10km of aggregate strike length to be explored."
Trivett described Syrah as the graphite poster company of the moment, with its shares recently soaring to a 12 month high after impressive drill results were released at the Balama project, placing it in a favourable position to raise capital.
All three companies were in very early stage of development while Perth-based Castle Minerals had also been hitting strong graphite intersections along its Kambale deposit which lies along the Wa-Lawra greenstone belt in northwest Ghana.
The first batch of results from drill testing along a 600m long zone south of the current resource returned highlights of 23m at 6.2% graphitic carbon from 5m, 12m at 5.36% graphitic carbon, 13m at 5.4% graphitic carbon from 10m, and 15m at 6.15% graphitic carbon from surface.
Last month, Castle revealed a maiden resource estimate for Kambale of 14.4 million tonnes at 7.2% graphitic carbon for 1Mt contained graphite, including 6Mt at 8.6% graphitic carbon for 0.52Mt.