Beijing's intention to restrict graphite exports will have a disproportionate impact on international makers of electric vehicle battery components who have not yet transitioned to utilising as much synthetic material as Chinese rivals, according to industry insiders and experts.
Since it was revealed last Friday, China's newest limit on essential mineral exports, which Beijing claims is not aimed at a specific sector, has fueled confusion in the global EV supply chain.
Some Chinese manufacturers, even those with international operations, have stated that they expect the limits to have little impact because the majority of the EV batteries they produce utilise a synthetic material that is unaffected by the restrictions.
China controls the entire EV battery supply chain, including graphite production, which is the single largest component.
Graphite industries in the country process both natural and synthetic graphite mined domestically and abroad.
Analysts warn that the new rules could slow or reduce graphite supplies needed by companies in Japan, South Korea, and the United States to create anodes - the negative electrodes of EV batteries.
Beginning December 1, China will require export permits for high-end synthetic graphite as well as important forms of natural graphite under the new guidelines.
Several executives from graphite-using industries in China and around the world said they were still waiting for more information on the new rules.
A representative from Qingdao Haida, a significant Chinese graphite processor, said that the company produces spherical graphite, which is exported to South Korea and Japan and is used in lithium ion battery anodes. The representative did not want to be identified because they were not authorised to speak on behalf of the business.
"We haven't got any instructions from MOFCOM (China's Ministry of Commerce) on how to apply for export permits but it will definitely make the exporting process more inconvenient," the person said.
There were no comments on the issue available from Haida.
The recent move by China to require export permits for products containing gallium and germanium has shut off foreign shipments of the metals used to make chips.
In response to more inquiries from Reuters, the ministry of commerce remained silent. It was pointed out by a source with knowledge of Chinese government thought that graphite was also utilised in military hardware.
Chinese businesses, meanwhile, who have been constructing plants abroad, claimed the restrictions will not significantly impact their international business activities. The high-grade synthetic graphite with a density of 1.73 grammes per cubic centimetre and higher that is covered by the new regulations is not used by the Chinese companies.
Synthetic graphite is produced in enormous amounts in China, allowing for faster battery charging times.
Foreign manufacturers are starting to use natural graphite more frequently, but their transition from petroleum-based synthetic graphite has been slower. This is partly because petroleum-based synthetic graphite is more environmentally harmful to produce, and natural graphite anodes are typically less expensive, making them more susceptible to Chinese restrictions.
The Chinese company Gotion High Tech, sponsored by Volkswagen, says the graphite used in its batteries has a density of less than 1.7 grammes per cubic centimetre, meaning it is not affected by the limits. Gotion High Tech aims to open a plant in the United States and makes batteries in Germany.
The largest anode manufacturer in the world, BTR New Material Technology, also stated to the Shanghai government-run media outlet The Paper that the regulation would not have a significant effect on business because its products had a density of 1.5 to 1.7 grammes per cubic centimetre for EV batteries.
Leading Chinese anode manufacturer Ningbo Shanshan informed The Paper that the limitations would not affect its exports of items made of artificial graphite.
No responses were made by BTR or Shanshan, which have declared intentions to construct factories in Finland and Indonesia, respectively.
Global users of natural graphite include South Korea's POSCO Future M, Japan's Mitsubishi Chemical, which has two factories in China that generate natural graphite, and Hitachi Chemical, which is a division of Japan's Resonac Holdings Corp., according to research firm CRU Group.
A Resonac representative stated that the company was monitoring the issue and did not yet perceive any impact. He stated there were multiple approaches, depending on the specific product, but he declined to elaborate on the specifics of graphite acquisition.
Both POSCO and Mitsubishi Chemical declined to comment when asked about their thoughts.
Syrah Resources, an Australian-based supplier to Tesla that mines graphite in Mozambique and is constructing a plant in Louisiana, the United States, to create anodes, said on Thursday that it anticipates increased demand for natural graphite from customers outside of China prior to the implementation of the harsher regulations.
This week, Epsilon Advanced Materials (EAM) of India announced that it is in talks with suppliers to source raw materials, including natural graphite, and that it intends to establish a $650 million plant in the U.S. state of North Carolina to produce battery materials and components, including synthetic graphite.
"We believe that limiting the amount of graphite exported from China - and likely the price increase for graphite that it will create - exacerbates the challenges (and) exemplifies the need to develop synthetic graphite for the U.S. locally," EAM CEO Sunit Kapur said.
(Source:www.proinvestor.com)
Since it was revealed last Friday, China's newest limit on essential mineral exports, which Beijing claims is not aimed at a specific sector, has fueled confusion in the global EV supply chain.
Some Chinese manufacturers, even those with international operations, have stated that they expect the limits to have little impact because the majority of the EV batteries they produce utilise a synthetic material that is unaffected by the restrictions.
China controls the entire EV battery supply chain, including graphite production, which is the single largest component.
Graphite industries in the country process both natural and synthetic graphite mined domestically and abroad.
Analysts warn that the new rules could slow or reduce graphite supplies needed by companies in Japan, South Korea, and the United States to create anodes - the negative electrodes of EV batteries.
Beginning December 1, China will require export permits for high-end synthetic graphite as well as important forms of natural graphite under the new guidelines.
Several executives from graphite-using industries in China and around the world said they were still waiting for more information on the new rules.
A representative from Qingdao Haida, a significant Chinese graphite processor, said that the company produces spherical graphite, which is exported to South Korea and Japan and is used in lithium ion battery anodes. The representative did not want to be identified because they were not authorised to speak on behalf of the business.
"We haven't got any instructions from MOFCOM (China's Ministry of Commerce) on how to apply for export permits but it will definitely make the exporting process more inconvenient," the person said.
There were no comments on the issue available from Haida.
The recent move by China to require export permits for products containing gallium and germanium has shut off foreign shipments of the metals used to make chips.
In response to more inquiries from Reuters, the ministry of commerce remained silent. It was pointed out by a source with knowledge of Chinese government thought that graphite was also utilised in military hardware.
Chinese businesses, meanwhile, who have been constructing plants abroad, claimed the restrictions will not significantly impact their international business activities. The high-grade synthetic graphite with a density of 1.73 grammes per cubic centimetre and higher that is covered by the new regulations is not used by the Chinese companies.
Synthetic graphite is produced in enormous amounts in China, allowing for faster battery charging times.
Foreign manufacturers are starting to use natural graphite more frequently, but their transition from petroleum-based synthetic graphite has been slower. This is partly because petroleum-based synthetic graphite is more environmentally harmful to produce, and natural graphite anodes are typically less expensive, making them more susceptible to Chinese restrictions.
The Chinese company Gotion High Tech, sponsored by Volkswagen, says the graphite used in its batteries has a density of less than 1.7 grammes per cubic centimetre, meaning it is not affected by the limits. Gotion High Tech aims to open a plant in the United States and makes batteries in Germany.
The largest anode manufacturer in the world, BTR New Material Technology, also stated to the Shanghai government-run media outlet The Paper that the regulation would not have a significant effect on business because its products had a density of 1.5 to 1.7 grammes per cubic centimetre for EV batteries.
Leading Chinese anode manufacturer Ningbo Shanshan informed The Paper that the limitations would not affect its exports of items made of artificial graphite.
No responses were made by BTR or Shanshan, which have declared intentions to construct factories in Finland and Indonesia, respectively.
Global users of natural graphite include South Korea's POSCO Future M, Japan's Mitsubishi Chemical, which has two factories in China that generate natural graphite, and Hitachi Chemical, which is a division of Japan's Resonac Holdings Corp., according to research firm CRU Group.
A Resonac representative stated that the company was monitoring the issue and did not yet perceive any impact. He stated there were multiple approaches, depending on the specific product, but he declined to elaborate on the specifics of graphite acquisition.
Both POSCO and Mitsubishi Chemical declined to comment when asked about their thoughts.
Syrah Resources, an Australian-based supplier to Tesla that mines graphite in Mozambique and is constructing a plant in Louisiana, the United States, to create anodes, said on Thursday that it anticipates increased demand for natural graphite from customers outside of China prior to the implementation of the harsher regulations.
This week, Epsilon Advanced Materials (EAM) of India announced that it is in talks with suppliers to source raw materials, including natural graphite, and that it intends to establish a $650 million plant in the U.S. state of North Carolina to produce battery materials and components, including synthetic graphite.
"We believe that limiting the amount of graphite exported from China - and likely the price increase for graphite that it will create - exacerbates the challenges (and) exemplifies the need to develop synthetic graphite for the U.S. locally," EAM CEO Sunit Kapur said.
(Source:www.proinvestor.com)
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