China to review graphite taxes
Published: Thursday, 27 November 2014
Heilongjiang considers export tax adjustment; spherical subsidies encouraging mislabelling
Graphite miners, processors and Heilongjiang
government officials met to review export taxes from the
Chinese region at the end of Q3 2014, with a view to changing
tariffs in 2015.
With the local government keen to enforce
measures that will see less flake concentrate distributed to
other areas of the country and abroad, tax rises could be
announced approaching the end of the year.
The tax review adds to the ongoing programme of
consolidation in the region, which is seeking to limit smaller
and inefficient flake graphite.
Plans announced in April 2014, set out by the
province’s Ministry of Industry and Information
Technology, saw proposals to reduce the number of flake
graphite mining licences from 36 to 25 by 2020, with an
escalation in industry entrance standards expected to begin in
A change in taxes from Heilongjiang could
therefore add to the pressure on supply from the region, which
alone accounts for 64% of China’s total flake
While excess supplies are likely to prevent this
from having a major impact on the market in the short term, it
could limit low-cost supplies from the region in the longer
Also under discussion is the current subsidy in
spherical graphite prices, which was put in place to increase
value-added processing in the region.
While this has contributed to the increase in
spherical capacity in China over the past year, producers have
also suggested that some companies have been mislabelling flake
graphite exports in order to be able to offer cut-cost products
IM Data sources have suggested
that this has been a contributing factor to the ongoing slump
in prices throughout 2014.
Some have also stated that the subsidy has
created a significant over-capacity, which is limiting the
margins available from value-added processing.
|The decline in global graphite
|* Industrial Minerals Data forecast
Source: USGS, Industrial Minerals Data, China Ministry of
Land and Resources
Comprehensive data and analysis for
global mineral industries. Graphite and fluorspar available
Andy Miller, Analyst
Shruti Salwan, Analyst
Albert Li, Analyst