China to restrict graphite exports from December, a key battery material

From 1 December, China will require export permits for some graphite products on national security grounds. The Chinese Ministry of Commerce said this today, according to Reuters. China is the world’s largest producer and exporter of graphite, which is used in electric vehicle batteries.

China is introducing the restrictions as foreign governments increase pressure on its companies over their industrial practices. The European Union is considering tariffs on electric vehicles made in China over suspicions that they benefit unfairly from subsidies. This week, the US government expanded restrictions on Chinese companies’ access to semiconductors, including a ban on the sale of more advanced artificial intelligence chips made by Nvidia.

Under the new restrictions, China will require export permits for two types of graphite, including high-purity, high-hardness and high-strength synthetic graphite, as well as natural flake graphite and products made from it.

Analysts say the new measures are intended to secure domestic supplies of graphite for military use, as well as for domestic battery production. As electric vehicle sales rise, manufacturers are racing to secure sufficient supplies of raw materials, but shortages are a risk. It is not yet clear how much impact the new measures will have in the short term, as they do not ban exports but merely place them under control.

The restrictions are similar to those China introduced from 1 August for two metals needed to make chips – gallium and germanium. The restrictions have reduced exports of these metals from China in recent months.

New investment in the United States and Europe aims to reduce China’s dominance of graphite. Industry experts, however, expect this to be a tough battle.

According to Chinese customs data, major buyers of Chinese graphite include Japan, India, South Korea and the United States.

In recent years, China has reduced natural graphite mining to protect the environment and has increased synthetic graphite production since 2021. Synthetic graphite now accounts for 70 percent of China’s total production, consultancy Mysteel said.