China to Control Graphite Exports Starting Tomorrow... Government Says "No Supply Issues Expected"

Jang Young-jin, First Vice Minister of the Ministry of Trade, Industry and Energy, is presiding over the public-private joint graphite supply chain response meeting held on October 23 at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. [Image source=Yonhap News]

China is set to implement export controls on graphite, a key material used in the production of anode materials for electric vehicle batteries, starting December 1. In response, government and industry officials gathered on the 30th to closely cooperate to ensure there are no disruptions in graphite supply.

The Ministry of Trade, Industry and Energy announced that it held a joint public-private graphite supply chain inspection meeting at the Korea Chamber of Commerce and Industry in Seoul on the same day. The meeting was attended by government ministries including the Ministry of Trade, Industry and Energy, Ministry of Economy and Finance, and Ministry of Foreign Affairs, as well as domestic battery manufacturers, including the three major battery companies and POSCO Future M, industry representatives such as the Korea Battery Industry Association, the Materials, Parts, and Equipment (MPE) Supply Chain Center (KOTRA), and the Korea Mining Industry Promotion Corporation.

Lee Seung-ryeol, Director of Industrial Policy at the Ministry of Trade, Industry and Energy, attended the meeting and stated, "Based on previous cases of export controls on gallium and germanium, although it may take some time, we expect no significant issues in graphite supply." He added, "The government will prepare thoroughly to ensure that there are no disruptions in graphite supply, keeping even worst-case scenarios in mind."

The Korea International Trade Association also projected in its report titled 'Impact and Response Measures to China's Graphite Export Controls,' published last October, that while China's graphite export volume may temporarily decrease around December due to inspections when export controls are fully implemented, the scenario of exports normalizing within three months is highly likely.

Since China announced its plan to implement graphite export controls on October 20, the government has formed a dedicated task force to monitor related developments and prepare countermeasures in cooperation with the industry. Through various contacts between Korean and Chinese authorities, including the Korea-China Ministerial Meeting on Trade held on the 14th, the government raised concerns that China's new export controls could destabilize the global battery supply chain and urged transparent enforcement of export controls.

In response to these demands from the Korean government, China recently held an event in Beijing explaining the direction of its export control policy enforcement exclusively to Korean companies, which was seen as a friendly gesture toward Korea.

The three major battery companies and POSCO Future M have recently secured additional quantities of graphite for anode material raw materials and graphite anode materials ahead of China's export controls. The government has identified that companies have stockpiles sufficient for 3 to 5 months. Additionally, companies are actively pursuing supply chain diversification to reduce dependence on China.

POSCO International, a subsidiary of the POSCO Group, is pursuing plans to procure large quantities of natural graphite from Africa, including Tanzania. POSCO Future M is expected to begin full-scale mass production of artificial graphite made by processing by-products from steel manufacturing processes starting next year.

On October 20, citing the rationale of preventing military use, the Chinese government announced adjustments to graphite export controls, primarily adding high-purity natural graphite for secondary battery anode materials to the list of controlled export items. Artificial graphite had already been subject to export controls prior to this announcement. According to the Ministry of Trade, Industry and Energy, South Korea imported approximately $241 million worth of artificial and natural graphite for secondary battery anode materials last year, of which 93.7% was sourced from China.

This content was produced with the assistance of AI translation services.