China’s Tightening Control over the Global Graphite Market


China’s Ministry of Commerce has announced that, effective December 1, export permits will be mandated for specific graphite products, citing national security reasons. Graphite, a pivotal component for electric vehicle (EV) batteries, finds China at its epicenter, producing 67% of the global supply of natural graphite. Additionally, China refines over 90% of the world’s graphite, which is integral to almost all EV battery anodes.

This decision unfolds in a backdrop of escalating tensions and increasing scrutiny from foreign nations. The European Union is considering tariffs on EVs originating from China, attributing unfair advantages due to state-backed subsidies. Concurrently, the U.S. has broadened its restrictions on Chinese firms accessing semiconductors and has prohibited the sale of advanced AI chips by Nvidia to Chinese companies.

The new regulatory framework targets two primary graphite types for export permits: high-purity synthetic graphite and natural flake graphite. This is reminiscent of earlier controls over “highly sensitive” graphite products, which are now integrated into the updated regulations. Analogous constraints were previously placed on semiconductor metals, gallium and germanium, which witnessed a marked reduction in exports from China.

Even though the U.S. and Europe are venturing into the graphite domain to counteract China’s monopoly, experts forecast a formidable path ahead. The central graphite importers from China currently include Japan, India, and South Korea.

These developments occur as the EV market is on an upward trajectory, with sales surging past 10 million units the previous year and predictions hovering around 14 million for the current year. This booming sector has amplified the demand for graphite, with the global market for battery use expanding by 250% since 2018. China’s contribution was a colossal 65% of the total production in the past year.

The growing EV market accentuates the criticality of raw materials like graphite. As China further consolidates its hold on the graphite industry, potential ramifications for the global EV landscape are imminent.

Right after writing this summary, I was able to reach Jack Lifton, Co-Chairman of the Critical Minerals Institute, to delve deeper into the repercussions and intricacies of these developments.

Lifton’s perspective on China’s recent announcements was direct: “This isn’t fundamentally about national security. It’s a manifestation of China’s discontent with the West’s ongoing rhetoric of reducing dependence and risks associated with their supply chain.” Lifton highlighted China’s pivotal role in graphite anode processing, suggesting that the dream of a rapid shift to EVs in the West could remain elusive without China’s involvement.

Addressing the challenges to China’s manufacturing supremacy, Lifton commented, “For years, the West prioritized cost-cutting, and China emerged as the answer. Today, the tables have turned, and the West is waking up to the consequences of its over-reliance on Chinese supply chains.”

On the topic of recent restrictions, Lifton opined, “China is fortifying its position in the critical minerals sector. The reality is that with China’s stronghold, the anticipated rapid transition of the West to EVs is looking increasingly optimistic.”

When quizzed about what minerals might be next in line, Lifton’s prediction was clear: “Post rare earths and graphite, my money would be on lithium or cobalt. The West’s ambitions for the EV transition are simply too vast for its current resources without China’s involvement.”

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2 responses

  1. First Phosphate Avatar
    First Phosphate

    We have received numerous inquiries this morning about the move by China to restrict graphite exports and what this means for phosphate.

    95%+ of LFP batteries and phosphate for LFP battery comes out of China at the moment. China’s raw phosphate reserves are finite and could become seriously supply constrained by 2028 or earlier for fertilizer and LFP battery usage. Chinese phosphate export restrictions came into play in the summer of 2022 already.

    Capacity around purified phosphoric acid (PPA) in North America is tight and will become restricted to a point of zero excess supply by 2026-2028. Supply of phosphate rock just for fertilizer usage will be reduce production by 61% in North America by 2037.

    Phosphate is a big issue for fertilizer but an event bigger issue for LFP Battery. Benchmark Minerals has recently and formally began coverage on Purified Phosphoric Acid (PPA) for LFP battery. See:

    We need a new source of phosphate and, moreso, copious amounts of purified phosphoric acid (PPA) for LFP batteries which First Phosphate (CSE: PHOS) plans to bring online in Saguenay, Quebec, the newly forming LFP battery valley of North America. A very conservative view of PPA requirements by CRU Group see demand doubling by 2040-2045. We believe this demand to be 3x – 5x of what CRU is predicting conservatively and by 2030-20235.

    This is yet another wakeup call out of China. Thank you.


    Nous avons reçu de nombreuses demandes ce matin concernant la décision de la Chine de restreindre les exportations de graphite et ce que cela signifie pour le phosphate.

    Plus de 95 % des batteries LFP et du phosphate pour les batteries LFP proviennent actuellement de Chine. Les réserves de phosphate brut de la Chine sont limitées et pourraient être sérieusement restreintes d’ici 2028, voire plus tôt, pour les engrais et les batteries LFP. Les restrictions chinoises à l’exportation de phosphate sont entrées en vigueur dès l’été 2022.

    La capacité autour de l’acide phosphorique purifié (PPA) en Amérique du Nord est limitée et deviendra restreinte à un point d’offre excédentaire nulle d’ici 2026-2028. L’offre de phosphate uniquement pour l’utilisation d’engrais réduira la production de 61 % en Amérique du Nord d’ici à 2037.

    Le phosphate est un problème important pour les engrais, mais il l’est encore plus pour la batterie LFP. Benchmark Minerals a récemment et officiellement commencé à couvrir l’acide phosphorique purifié (PPA) pour les batteries LFP. Voir :

    Nous avons besoin d’une nouvelle source de phosphate et, plus encore, de grandes quantités d’acide phosphorique purifié (PPA) pour les batteries LFP que First Phosphate (CSE : PHOS) prévoit de mettre en production au Saguenay, au Québec, la nouvelle vallée des batteries LFP de l’Amérique du Nord. Une vision très conservatrice des besoins en PPA par le groupe CRU prévoit un doublement de la demande d’ici 2040-2045. Nous pensons que cette demande sera 3x – 5x supérieure à ce que CRU prévoit de manière conservatrice d’ici 2030-20235.

    Il s’agit là d’un nouvel appel de la part de la Chine. Nous vous remercions.

  2. Dr. Mike Hirschberger Avatar
    Dr. Mike Hirschberger

    Hi Jack and Tracy

    I would add the battery precursor HP MSM (High Purity Manganese Sulfate Monohydrate) to the list as there is less than 5% of processing that occurs outside China. For example, Project Blue has crafted a new monicker–ROW (Rest of World) in an effort to add new non-Chinee capacity. E 25-the Oz Mn junior-and many other Lemmings have followed suit by announcing aggressive build-outs of multiple new HP MSM plants. How quick-how much-how soon-what price all follow these newly minted efforts.

    Waiting in the wings should there be the slightest wiggle of success is the Chinese perched like a smiling Cheshire Cat with sledgehammer in hand. The Chinese HP MSM Industry with a breakeven of <$1000/mt (and maybe way less) compared to ROW $1,200 to $1,500-how possibly would the Chinese react?

    Put another way, as cobalt-free Battery chemistries tilt toward LMFP with the M playing the key role as 'The Working Man's Cobalt', China remains vigilant. Should the perception of market share dominance crack just a little, wither the ROW?

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