China is holding back graphite exports. What now?
USA, South Korea and Poland are the main destinations of Chinese graphite exports
() – China is ready to put a brake on exports of processed graphite, an essential component of modern rechargeable batteries. As announced today by the Government starting from 1 December this year, Chinese companies will need special permits to bring the mineral outside the national borders. The Chinese Government has announced that it will take the mineral outside China. A choice justified by Beijing with the will to “protect national security” but that can only worry the world economy.
Yes, because today the country brings to the world market 49% of natural graphite, one of the 34 critical raw materials identified by the EU. It produces 70% of the synthetic version obtained from fossil fuels, an expensive and polluting version but characterized by a higher density and thermal conductivity. If we consider the refined product (there are different grades of material depending on the processing and density), the Chinese market share still rises, up to almost 90%.
According to information from the Ministry of Commerce and the General Administration of Customs, the restrictions on exports of graphite will affect only three grades of material. Nevertheless, it is easy to imagine the tensions that will follow. Especially considering that the United States are among the major buyers, along with South Korea, Poland, and Japan, and that the government move comes with perfect timing after the White House’s announcement that it wants to strengthen control over the export of AI chips to China.
This commercial arm wrestling is nothing new. Nor is it the first time that the People’s Republic has used its dominant position on supply chains to raise its voice. Similar restrictions to those imposed on graphite have involved several materials over the past few years. The last move? That of August 1, 2023 on exports of gallium and germanium, two essential materials for the production of chips.
