https://source.benchmarkminerals.com/article/china-graphite-export-restrictions-could-hinder-ex-china-anode-development

Slightly misleading headline imo, more like "hinder ex-China anode production". This is the key quote:
“You would expect this to trigger the rise of anode plants outside of China,” Simon Moores, chief executive of Benchmark, said.

China graphite export restrictions could hinder ex-China anode development

China’s decision to restrict some exports of graphite products could hinder production of battery anodes in South Korea and elsewhere, making the electric vehicle supply chain even more reliant on China.

The Ministry of Commerce and the General Administration of Customs said on Friday that exports of three types of graphite would not be allowed without permits, in order to protect the country’s “security and interests.” This includes high purity synthetic graphite and their products as well as natural flake graphite and its products, which includes spherical and expanded graphite.The main end use market for spherical graphite is lithium ion batteries.

In the short term, before the policy takes effect on the first of December, participants may use the window of opportunity to increase stockpiles of graphite.

Once in effect, the policy could make it more difficult for overseas companies to buy Chinese graphite feedstock products, depending on how stringently they restrict permits, according to Benchmark. Some overseas anode producers such as those situated in South Korea, for example, rely on imports of spherical graphite (USPG) from China.

The announcement stated the new arrangement is temporary, however, if it lasts into the longer term, it is likely to accelerate the build out of a localised graphite and battery anode supply chain outside China.

It comes after US President Bident increased controls on the export of advanced chips to China last week, increasing trade tensions between the two countries. The European Union has also announced an investigation into Chinese electric vehicle subsidies.

China’s graphite dominance

China is the world’s largest producer and exporter of graphite, producing almost 70% of the world’s supplies of natural and synthetic graphite this year, giving it strong influence over global supply chains. China is also currently responsible for nearly all spherical graphite supply andproduces over 90% of the world’s anodes for lithium ion batteries.

Chinese anode companies such as BTR, Shanshan and Putailai are deeply embedded in the global electric vehicle supply chain, supplying leading battery companies such as Panasonic, CATL, and LG Energy Solution.

The global anode market is dominated by synthetic graphite with 70% of anodes set to be made from synthetic graphite this year and 25% from natural graphite.

Graphite is also used in the nuclear power industry, as material in reactor cores.

“As the world’s largest producer and exporter of graphite, China has long been firmly fulfilling its international obligations such as non-proliferation,” the Ministry of Commerce said in published answers to questions on the measures.

It comes as prices for natural graphite have fallen sharply this year, due to oversupply and relatively sluggish demand from the electric vehicle and industrial markets. That has hit graphite mining operations outside of China, with some mines shutting production.

Prices for (94-95% C) -100 mesh (FOB China) natural graphite have fallen 30.8% so far in 2023 as assessed by Benchmark.

South Korea’s anode buyers

The policy will come into force on the first of December, and could introduce delays for exports, depending on how long it takes for permitting to be approved.

It could also hinder ex-China anode production for manufacturers who currently rely on feedstock material from China, according to Tony Alderson, an analyst at Benchmark.

It may further push anode manufacturers outside of China to be more reliant on ex-China graphite material, such as from Africa, he said.

South Korean anode producer Posco has in recent months signed two agreements with flake graphite producers outside of China.

Last month it signed an agreement with Canadian-listed flake graphite producer NextSource Materials for the offtake of 30,000 tonnes a year of graphite over ten years. The same month it signed an offtake agreement with Australian-listed graphite project developer, Black Rock Mining, to secure graphite material from the latter’s second phase of its Mahenge project in Tanzania.

African graphite producers have struggled this year due to lower prices, with Australia’s Syrah Resources temporarily stopping production at its mine in Mozambique in June 2023.

Depending on the stringency of these measures announced by China on Friday, this could improve prices for ex-China projects in the future, according to Daisy Jennings-Gray, an analyst at Benchmark.

Ex-China anode supply chain

The US Inflation Reduction Act and the European Union’s Critical Raw Materials Act are accelerating the development of an ex-China anode supply chain.

“You would expect this to trigger the rise of anode plants outside of China,” Simon Moores, chief executive of Benchmark, said.

Last month Australian company Talga Resources broke ground on Europe’s first anode plant in the north of Sweden.

In the US, Novonix, Annovion and Syrah Resources, among others, are also building anode projects.

But Chinese companies are also expanding overseas, with Ningbo Shanshan and Putailai agreeing this year to build plants in Europe. It’s uncertain how Beijing’s policies on exports will impact these developments, however.

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