EV Battery Coys Kick as China Plans to Restrict Graphite Exports

Beijing’s move to restrict graphite exports will have a disproportionate impact on foreign makers of electric vehicle battery components who have not yet shifted to using as much synthetic material as Chinese counterparts, industry insiders and experts have said.

China’s latest limit on critical mineral exports, which Beijing said is not targeted at a specific sector, has fuelled uncertainty in the global EV supply chain since it was announced last Friday.

Some Chinese manufacturers, including those with operations overseas, said they expect limited impact from the rules as most EV batteries they make, use a grade of synthetic material that is unaffected by the curbs.

China dominates the global EV battery supply chain including production of graphite – the single largest component.

Graphite companies in the country process both the natural material mined domestically and overseas, as well as synthetic forms.

Japan, South Korea and the United States are top buyers of both natural and synthetic Chinese graphite, and analysts warned the new measures could slow or reduce graphite supplies needed by companies there to produce anodes – the negative electrodes of EV batteries.

Under the new rules, China will require export permits starting Dec. 1 for high-end synthetic graphite, as well as key forms of natural graphite.

Several executives in China and globally at companies that use graphite said they were still seeking further clarity on the new measures.

Reuters/Hauwa Abu