China has announced its intention to impose export restrictions on graphite, a mineral essential for electric vehicle (EV) battery production, citing national security concerns.
This move comes shortly after the United States introduced stricter limitations on the types of semiconductors American companies can sell to Chinese firms.
China, which dominates global graphite production and processing, has stated that export permits will be required starting in December for synthetic graphite materials, including high-purity, high-strength, and high-density versions, as well as natural flake graphite.
The Institute for Energy Research in Washington, DC, notes that automakers are actively seeking alternative sources of graphite outside of China due to the increasing demand for EV batteries, which has surpassed other uses for the material.
Global EV sales, including fully electric and hybrid vehicles, have experienced significant growth, with sales exceeding 10 million units in the past year and expected to reach nearly 14 million vehicles this year.
According to the US Geological Survey, the graphite market for battery use has expanded by 250% globally since 2018, with China being the world’s leading graphite producer, accounting for around 65% of global production.
Graphite is also widely used in industries such as semiconductors, aerospace, chemicals, and steel.
These export restrictions come at a time when China is facing scrutiny from multiple governments concerning its commercial and trade practices.
It has been engaged in a tech war with the United States and its allies in Europe and Asia for more than a year over access to advanced chips and chipmaking equipment.
In July, Beijing imposed export restrictions on gallium and germanium, crucial minerals for semiconductor production, leading to a halt in overseas shipments of these materials.
Although Ivan Lam, a senior analyst at Counterpoint Research, mentioned that China had previously implemented temporary export controls on graphite with minimal industry impact, he anticipates that these new rules will lead to increased prices.
Lam believes that graphite prices will continue to rise due to supply and demand imbalances, including factors like the Russia-Ukraine conflict, which has disrupted the graphite supply chain.
China holds a significant share of the global supply chain for critical minerals essential for EV battery production. It refines approximately 60% of the world’s lithium and 80% of the cobalt, according to the US Department of Energy.
Source-CNN
