VINACHEM

Total exports of flake graphite (HS Code: 25041010) stood at 3,236 tonnes in the first two months of 2024, down by 77.66% from 14,483 tonnes in the same period in 2023, according to data from China’s customs.

Total exports of spherical graphite stood at 2,567 tonnes in January and February, down by 64.54% from 7,240 tonnes in the same period in the previous year.

The drop in China’s graphite exports in the first two months of 2024 was in line with market expectations given that the significant rise in shipments in November 2023 has provided consumers with sufficient inventory until February, sources said.

There is also uncertainty surrounding how long it will take for export licenses to be issued by China’s Ministry of Commerce, sources added.

But the monthly shipments for flake graphite and spherical graphite indicate that Chinese suppliers have been receiving export licenses for destinations like US, South Korea, Japan and countries in Europe, sources told Fastmarkets.

“Total volumes of flake and spherical graphite may increase in March with more suppliers receiving export licenses,” one flake graphite trader said.

Total shipments of flake graphite stood at 2,295 tonnes in February, up by 144.06% from the 940.61 tonnes in January. The shipment of flake graphite in January was down by 34.11% from 1,427 tonnes in December.

Major destinations for China’s flake graphite exports in January and February were South Korea at 703 tonnes (21.74%), Japan at 417 tonnes (12.90%) and the Netherlands at 380 tonnes (11.74%).

Total shipments of spherical graphite stood at 1,549 tonnes in February, up by 52.34% from 1,017 tonnes in January. The shipment of spherical graphite in January was up by 7.28% from 948 tonnes in December.

Destinations for spherical graphite during January and February include Japan at 1,567 tonnes (61.04%), the US at 735 tonnes (28.63%) and South Korea at 243 tonnes (9.47%).

Limited short-term impact on international graphite supply

China has been dominating the supply of most graphite products, accounting for 60% of global natural flake supply, 99% of uncoated spherical graphite and over 90% of natural anode, according to Fastmarkets’ battery raw materials research.

China’s export control policy which kicked in from December 2023, and the Inflation Reduction Act (IRA) in the US has led to major downstream players like anode producers and battery makers and auto original equipment manufacturers (OEMs) to diversify their sources of raw materials.

For example, Australia-listed graphite miner and anode producer Syrah Resources has become the first vertically integrated natural graphite anode producer outside of China, with production coming out from its Vidalia plant in Louisiana. The company has also inked multiple agreements with downstream customers like battery materials manufacturer Samsung SDI, EV battery manufacturer SK On, and carmaker Ford for anode materials.

“There is sufficient capacity of natural flake graphite for the rest of the world, but the major concern for downstream anode and battery makers could be the processing capacity for uncoated spherical graphite on the natural side,” a trader in the US said.

Meanwhile, in the refractories industry, which is traditionally a major downstream application for flake graphite, slower exports of flake graphite from China have also failed to provide support for the flake graphite prices in markets outside of China, sources said.

“Consumers who used to source from China have been trying to seek other sources to reduce their dependence on Chinese materials, and the shift has been accelerated by China’s export control policy on flake graphite, with more inquires being received for materials from Africa,” a graphite producer in Africa said.  – Platts –