China tightens graphite export controls to the US

China’s Ministry of Commerce (MOFCOM) has announced further export controls for graphite, specifically to the US, which could disrupt American anode manufacturing.

The additional controls on graphite are part of broader measures that limit the export of ‘dual-use items’ – those which can be used for civil or military purposes – to the US.

The controls come one year afterChina first introduced restrictionsthat required exporters to obtain special licences to export graphite products.

“This announcement stands out due to its immediate implementation, leaving US companies that directly source material from China without time to stockpile and buffer potential supply chain disruptions,” said Tony Alderson, senior analyst at Benchmark.

Why has China introduced new export controls on the US?

A spokesperson for MOFCOM said the measures were taken to protect national security and fulfill international non-proliferation obligations. The spokesperson also said the US had abused export control measures and restricted exports of relevant products to China and placed multiple Chinese companies on sanctions lists to suppress and contain them.

The measures come as a retaliation to the US imposing new export controls to inhibit China’s ability to develop artificial intelligence for its military.

“This development further underscores the ongoing geopolitical tensions between China and the US, where trade tariffs and export regulations continue to serve as tools in their economic countermeasures,” said Alderson.

Why has China included graphite in its tightening of export controls to the US?

Very high purity graphite material has a number of key uses in nuclear reactors. It is also used in the production of semiconductors and in the field of aviation.

However, China’s dominance in the production of natural and synthetic graphite, as well as uncoated spherical purified graphite, makes it a useful tool for inhibiting areas of US industry such as anode production.

What impact will this have on the graphite market?

There will be an inevitable drop off in Chinese graphite exports to the US.

“Several uncertainties remain, such as the specific types of graphite covered and the exact level of stringency under the new rules. Nonetheless, short-term supply chain disruptions are likely,” said Alderson.

US anode manufacturing is not the target of the restrictions, but the more stringent testing that graphite material will have to pass to be exported will affect the wider market.

“Enhanced scrutiny to prevent military end-use will likely lead to longer processing times and increased delays across the supply chain,” said Alderson.

Though there is growing graphite production outside of China, it will take time to establish new deals and undergo qualification periods.

Benchmark’s graphite and anode forecasts include specialist analysis of geopolitical and economic developments shaping these markets and the wider energy transition. Complete the form below to learn more about Benchmark’s:

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