I don't see how this creates what industry analysts call a "de facto ban" on Chinese graphite imports considering they produce 99% of AAM. Where else do these analysts think battery manufactures are going to get AAM from? It will help with flake imports but the US doesn't import much in the scheme of things because they don't have much of a manufacturing capacity to turn the flake into something useful.
Graphite is a key raw material used to make anodes of the batteries, and nearly 180,000 metric tons of graphite products were imported into the US last year, with about two-thirds of these deliveries coming from China, according to BloombergNEF. China dominates the processing capacity of graphite, with the International Energy Agency calling the material one of the most exposed to potential supply risks and “requiring urgent efforts for diversification,” according to a report in May.
My biggest bugbear is these so called media analysts and reporters don't differentiate graphite into mined flake and processed. They don't really understand the global graphite market or they would. The only ones who understand are Benchmark and FastMarkets but there analysis is behind a $3000 pay wall.
The US imports about 100kt of AAM which leaves around 80kt of imports of flake plus other processed graphite like blocks and rolls for furnaces etc from China. Unless the US is prepared to shut down their Li battery manufacturing, importing 100kt AAM isn't going to change regardless what the tariffs are. The only change in the next 3 years is how much flake the US imports from China which is less then 40kt if two-thirds of the current 180kt "graphite" deliveries comes from China.
Also the Chinese are selling AAM for half the price SYR can produce it for. I'm not sure 100% tariffs will shift Musk.
Tesla and its key battery supplier, Japan’s Panasonic Inc., were among companies pushing to block the new tariffs, arguing that they rely on Chinese graphite imports because the domestic industry hasn’t developed enough to meet the quality standards and volume that the carmaker requires.
Tesla keep pushing their bazar catch 22 argument. They know the domestic industry can't develop enough AAM to meet volume until China's subsidies are neutralised by tariffs to encourage investment into the domestic market to expand enough to compete. They don't seem to care about derisking their supply lines.
IMO, the only thing which will significantly change the global graphite market is 700%-900% tariffs in the US and Europe together with tariffs on Chinese EV's so they don't undercut the local EV manufactures while AAM producers ramp up. 700%-900% tariffs face a high risk of a TACO event. Unless of course as CosmicShrug suggests, they can slip it past him without telling him about it.
The good news is Westwater thinks they'll finish building their 12kt AAM plant next year. SYR have the contract to supply the flake for their AAM plant. It will take 2 years to ramp up. They want to expand to 50kt by 2028 plus build their own mine.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)