China moves to restrict graphite exports

Five Second Summary:

China's new restrictions on graphite exports are raising concerns for Western electric vehicle (EV) battery component manufacturers and could change market dynamics for synthetic and natural graphite demand.

The companies:

• Gotion High Tech

• BTR New Material Technology

• Ningbo Shanshan

What's happening:

• China's recent restrictions on critical mineral exports, including graphite, may disproportionately affect foreign EV battery component makers that haven't shifted to using synthetic materials as much as their Chinese counterparts.

• Chinese companies, including Gotion High Tech, BTR New Material Technology, and Ningbo Shanshan, have been building overseas plants and anticipate limited impact as their products use synthetic graphite not covered by the new measures.

Numbers + facts:

• China's new rules, effective from December 1, require export permits for high-end synthetic graphite and key forms of natural graphite.

• China dominates the graphite anode supply chain - the single largest part of an EV battery by weight.

• The impact on companies like Gotion High Tech, BTR New Material Technology, and Ningbo Shanshan is expected to be minimal, as they use synthetic graphite with characteristics that fall outside the restricted category.

Looking ahead:

• Western countries will continue to seek additional supply chain security around graphite, but have yet to take major concrete steps.

• Chinese companies, especially those using synthetic graphite, could be better positioned to navigate the new restrictions, potentially maintaining stability in their operations abroad.

• The graphite export curbs underscore the intricate global dependencies within the EV supply chain and the strategic choices companies make in adopting materials that align with regulatory dynamics.

Read more: Global EV battery supply chain puzzles over China graphite curbs