On Friday, Beijing announced the need for special export permits for certain types of graphite from December 1, emphasizing that this decision was not directed against any particular country. According to new restrictions, exporters from China will need permits to send two types of graphite, including high-purifier synthetic graphite and natural vague graphite and its products.
China dominates the global chains of graphite supply, which is a key component for electric vehicles. Demand for graphite is expected to increase by 20-25 times in the period from 2020 to 2040, according to the International Energy Agency (IEA).
This step from Beijing followed shortly after Washington tightened control of the export of semiconductors to China. The supply chain for electric vehicles has become a source of growing confrontation between Beijing and the West.
China is the world’s largest manufacturer and exporter of graphite, processing more than 90% of the global graphite in anode material used in electric vehicles. The main buyers of graphite from China include the United States, South Korea, Japan, Poland, and India.
Graphite is the main component in volume in the battery of the electric car, making up 95-99% of anode material in lithium-ion batteries.
Graphite prices will probably increase, but China’s last actions will also strengthen the need to search for alternative sources of this key material for batteries.
Some manufacturers of electric vehicles have already begun diversification of their supplies outside China. Earlier this year, Tesla entered into an agreement on deliveries with the Australian company Magnis Energy Technologies.