China’s 2018 spherical graphite exports increased by 39% year-on-year as of the end of October 2018 as electric vehicle battery demand surges.
Heilongjiang, China’s largest graphite producing region, recorded production of over 90,000 tonnes of spherical graphite from Hegang, a number it seeks to increase to over 100,000 tpa (tonnes per annum) by 2020, with an additional 80,000 tpa targeted for anode supply. Expansion of this scale in one of the country’s key producing regions will further cement China’s dominance in the battery-grade graphite market.
Heilongjiang’s provincial government announced updated figures for production from the Hegang region in November, reporting flake concentrate production increases of 23% for the year, and a 117% increase in uncoated spherical graphite production. The region is aiming to increase its flake graphite concentrate production capacity to over 500,000 tpa by 2020, with a growing focus on value-added processing for the battery market.
We have seen sharp price increases for spherical graphite during 2018, during which 15 micron uncoated material (99.95%) prices are up 20.0%. However, the rapid price increases seen for spherical graphite grades through 2018 have slowed in Q4, with the majority of prices stabilising within existing ranges.
Batteries continue to be the major area for growth in the market which was further underlined as China closed in on its 1m target for EV production this year. Output by the end of October was over 880,000 units with Q4 typically being the strongest time of the year for production.
This escalation in Chinese output comes despite the transition period for subsidies in H1 2018. An adjustment in subsidy policy is set to be implemented again moving into 2019, with an announcement from the government expected in late-December.
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