One Year After China's Graphite Export Controls, the EU Remains Highly Dependent; EU Confirms Tariffs on Chinese E-Cars
Issue 166, 7th October 2024
By the end of this summer, Chinese scientists announced a breakthrough in developing ultra-high-purity graphite with a purity of 99.99995%. The previous top purity, to the best of our knowledge, was reported at 99.9993%. While the difference may seem negligible, it actually represents 650 parts per million (ppm) fewer impurities. In industries like electronics, where ultra-high purity is essential, even this small variance can greatly impact performance.
To put this into perspective: imagine a circular graphite rod, 200 meters long but only as thick as your thumbnail. With 99.9993% purity, that rod would contain 14 grams of impurities. However, with 99.99995% purity, the impurities drop to just 1 gram, demonstrating the remarkable advancement in precision and purity.
In October 2023, China announced export controls on graphite
In 2023, China was the world’s leading graphite producer, producing an estimated 77% of total world production. Approximately 15% of graphite produced in China was amorphous and about 85% was flake. In October, China announced export restrictions to take effect on December 1 on certain goods, including flake graphite, spherical graphite (natural and synthetic), expandable graphite, and some synthetic graphite products.
Artificial Graphite
In 2024, the EU will reduce artificial graphite imports by 15%, dropping to 132,000 tons from 155,000 in 2023. Imports from China will face a steeper decline of 24%, falling to 86,000 tons from 113,000, yet still accounting for 65% of the total.
Natural Graphite
In 2024, the EU will boost natural graphite imports by 9%, reaching 83,000 tons from 76,000 in 2023. Imports from China will rise by 64%, climbing to 35,000 tons from 21,000, making up 42% of total imports.
Expandable Graphite
In 2024, the EU will increase expandable graphite imports by 32%, reaching 30,000 tons from 23,000 in 2023. Imports from China will rise by 7%, climbing to 20,000 tons from 19,000, making up 69% of total imports.
China's exports of graphite following the export control measures
See our estimates for 2024
Artificial graphite exports (HS 3801 1000) will remain the same as in 2023, at approximately 375,000 tons. However, exports of graphite in flakes or spherical form are expected to drop by more than 25% in 2024
Outlook
Demand for graphite flakes is such that Fastmarkets, just launched a pricing benchmark to provide greater transparency and reliability for battery manufacturers, graphite producers and investors. US graphite demand is set to rise by more than 600% to almost 700,000 tons by 2034. In general, graphite consumption is expected to continue to increase, owing largely to growth from the lithium-ion battery market.
Recycling
The abundance of graphite in the world market inhibits recycling efforts.
EU Approves Proposal to Impose Tariffs on E-Car Imports from China
Much of the commentary centers on three main aspects: the voting decisions of each member state, the potential for remedying the situation, and, of course, the possibility of retaliation from China.
Three Years of China’s Unofficial Ban on Imports from Lithuania
Car Import Sources to China Over the Past Decade
Although China’s car imports have dropped across the board, the EU has increased its share.
China's Wave of E-Cars Floods Brazil
China Can't Offset EV Export Growth Without the EU; Excluding Brazil, Exports Are Declining
China's electric car exports rose just 2.5% in the first eight months of 2024, despite a surge of Chinese e-cars flooding Brazil. Excluding Brazil as an outlier, the value of China's EV exports is actually declining.
U.S. Commerce Blocks Chinese Solar Companies from Circumventing Rules of Origin
U.S Commerce found that certain Chinese producers are shipping their solar products through Cambodia, Malaysia, Thailand, and/or Vietnam for minor processing in an attempt to avoid paying antidumping and countervailing duties.
Companies circumventing the rules of origin via South East Asia countries were,
BYD Hong Kong; New East Solar; Canada Solar; Trina Solar; Vina Solar
Employment Fails to Take Off
Chinese Outbound Travel Roars Back in 2024
Visitor Numbers to China Return to Pre-COVID Levels, Still Short of the Golden Summer of 2015
Houthi Actions Slash Egypt's Suez Canal Revenue by 60%
The revenue from the Suez Canal over the last eight months has decreased by approximately 50% to 60%; therefore, the losses we have incurred have exceeded $6 billion
Abd el-Fattah el-Sisi, President of Egypt
Hold larger inventories
The current turmoil shows no signs of ending in the short term, and the general recommendation is to hold larger inventories. EU ports, such as Algeciras by the Strait of Gibraltar, are already at maximum capacity. As a side effect, there is increased competition from the Port of Tanger in Morocco, with carriers avoiding the payment of CO2 emission fees.
Indonesia Bans TEMU Over Concerns Regarding Its Impact on Local SMEs
TEMU is operated by PDD Holdings, the parent company of the Chinese retailer Pinduoduo. The ban follows the Trade Ministry's claim that the platform’s direct-to-consumer sales model conflicts with Indonesian trade regulations, which require intermediaries or distributors.
China Turns to Russian Pork as Potential Sanctions Against the EU Loom
Though still in very small quantities, China is set to triple its imports of pork, including both meat and offal, from Russia in 2024. Swine meat imports from Russia will account for approximately 1.3% of China's total imports, up from virtually none in previous years.