Battery Materials Stocks Rally Globally as US Imposes 93.5% Levy on China Graphite Imports

TradingKey - The U.S. Department of Commerce announced a preliminary ruling on July 17, deciding to impose a 93.5% anti-dumping tariff on imported anode-grade graphite from China. Combined with existing tariffs, the effective tax rate for importing such graphite will reach 160%.

Anode-grade graphite is a crucial raw material for lithium-ion batteries used in electric vehicles (EVs). Following this news, shares of global battery material manufacturers experienced a notable increase.

Australian mining company Syrah Resources saw its stock rise by 38%. South Korea's Posco Future M increased by approximately 24%. Canadian graphite producers like Nouveau Monde Graphite and Northern Graphite Corp. also witnessed significant stock price gains. Asian battery-related companies such as LG Energy Solution and Contemporary Amperex Technology Co., Limited (CATL) also showed marked increases in their stock prices.

China dominates the global graphite supply chain, with data showing that two-thirds of the approximately 180,000 tons of graphite products imported by the U.S. last year came from China. Previously, the U.S. Graphite Producers Association submitted a complaint in December requesting an investigation into whether Chinese companies have violated anti-dumping laws.

Tesla and Japan's Panasonic have both publicly opposed the ruling. Tesla stated that the domestic graphite industry in the U.S. has not yet reached the required production scale and quality standards for the electric vehicle sector. Panasonic emphasized that graphite costs account for less than 8% of total battery costs; however, if these costs were to double, battery prices could increase by over $1,000.

The International Energy Agency's report indicated that graphite's position as a core material for lithium-ion batteries is unlikely to be replaced by silicon-based materials in the short term. While this U.S. policy aims to support domestic supply chains, the sharp rise in import costs of Chinese graphite is leading to supply chain tightness, and domestic production capacity in the U.S. is unlikely to fill this gap in the near term. This situation may instead compel companies to adjust their supply chain strategies accordingly.