Shipments had surged in November, but the new export controls meant total exports of flake graphite (HS code: 25041010) dropped by 93.93% on a monthly basis to 1,427 tonnes in December from 23,502 tonnes a month earlier, while exports of spherical graphite (HS code: 25041091) slumped by 92.22% to 948 tonnes in the same comparison, down from 12,186 tonnes in November, according to China customs data.
Exports to major destinations also slowed notably in December. Flake graphite volumes to Japan fell from 6,138 tonnes in November to zero in December, while exports to the United States fell from 511 tonnes in November to zero in December.
Total exports of spherical graphite to Japan and the US fell to zero in December, with exports to Japan at 2,238 tonnes and exports to the US at 280 tonnes in November.
December shipments to South Korea, meanwhile, plunged to just 948 tonnes, from 8,830 tonnes in November. The average monthly shipments of spherical graphite to South Korea stood at 3,000 tonnes in 2022, according to China customs data.
Slower demand and lengthy license application drove export slump
The main driver behind the massive slump in export volumes was probably a rush to buy in November, prior to the introduction of the export control policy on December 1, along with the long review time for export license applications, sources told Fastmarkets.
“Most exporters in China started to apply for export licenses in December [and] it took some time for suppliers to learn about the regulations and get files right. Although some have got licenses since the second half of December, most are still waiting,” a graphite trader said. “Fortunately, our clients have prepared for that and [already have] inventory for the first quarter.”
A second graphite trader said that the high shipment volumes in November, slower demand and export licenses controls meant that traffic would be limited for the time being.
“We do not expect [to see] too many shipments before the end of February.,” the second trader said.
Market participants said there had been no significant impact felt in the international graphite markets, because of slow demand globally, but added that uncertainty remained over how the export controls will be implemented and whether certain destinations will be affected more than others in the future.
The export controls led to a limited increase in both flake graphite and spherical graphite prices on an FOB China basis in the final two months of 2023.
Fastmarkets’ price assessment for graphite flake 94% C, -100 mesh, fob China was $510-538 per tonne on Thursday, January 18, in line with the previous assessment on January 11, but down by 6.8% from $535-590 per tonne on November 30.
On the same day, Fastmarkets’ price assessment for graphite spherical 99.95% C, 15 microns, fob China was $1,900-2,200 per tonne, also in line with the previous assessment on January 11, but down by $50 per tonne on the mid-point, or 2.38%, from $2,000-2,200 per tonne on November 30.
Reduced exports from China might lend support to spot market prices in Europe, sources said, in addition to the rising shipping costs arising from the Red Sea crisis.
Fastmarkets’ price assessment for graphite flake 94% C, -100 mesh, cif Europe increased by $47.5 per tonne, or 7.79%, to $600-715 per tonne on January 18 from $600-620 per tonne on December 21.
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