China World's Top Graphite Producer to Curb Exports

The largest supplier and producer of natural graphite for electric vehicle batteries is China, which has seen increased demand. China will force exporters to apply for permits on December 1, with the US, South Korea, and Japan as key importers. From December, China will ban graphite exports to protect national security. The latest measure to regulate raw material supplies comes amid escalating tensions with the US.

Graphite makes batteries, fuel cells, and lubricants for industrial, petrochemical, defense, and aerospace. Electric vehicle battery raw material demand has increased in recent years. According to the US Geological Survey, Chinese graphite will account for 65% of global supplies in 2022.

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China imposes new export controls on graphite products

The announcement includes three high-purity, high-strength, and high-density artificial graphite varieties. Its products, six types of natural flake graphite, and related goods are the nine items subject to the new prohibitions. On Friday, China’s commerce ministry and customs authorities said that exporters must apply for permits starting December 1.

Data from Chinese customs revealed the US, South Korea, Japan, Poland, and India as major imports. The new limits are an upgraded and optimized version of temporary export controls on seven graphite-related products since 2006, five of which were abolished due to low sensitivity.

According to the Ministry of Commerce, graphite export limits are common worldwide. China, the world’s top graphite producer and exporter, has consistently fulfilled its international duties, including non-proliferation.

“Based on the need to safeguard national security and interests, China has implemented legal export controls on specific graphite items and temporary controls on some graphites.”

The ministry noted that the updated review will help China meet its non-proliferation duties, protect national security and interests, and stabilize the global supply chain.

“China’s normal adjustment of export controls does not target any specific country or region, and exports that comply with relevant regulations will be permitted,” the statement stated.

China tightens grip on critical mineral exports as US increases tech curbs

In 2020, the European Union listed natural graphite as a vital raw commodity as the world moves away from fossil fuels. It is also a strategic mineral for the US.

China, a key worldwide producer, has tightened its hold on critical mineral exports as Washington and its allies increase tech curbs, especially in the semiconductor sector.

The US banned China-specific Nvidia and Intel GPUs and two top Chinese GPU startups from exporting this week. China’s rapid artificial intelligence development would need to be improved by the ban on algorithm-training chips.

In July, Beijing imposed export limits on gallium and germanium, two semiconductor materials they quasi-monopolize.

Exports of the two crucial metals and related goods rose before the curbs took effect in August. But they have declined. In July, former Vice Minister of Trade Wei Jianguo told the China Daily that “this is just the beginning of China’s countermeasures. China’s toolbox has many more types of measures available.”

“If the hi-tech restrictions on China become tougher in the future. China’s countermeasures will also escalate,” said Wei, chairman of the state-backed China Centre for International Economic Exchanges think tank.