The year 2017 started with graphite prices ticking lower
following the cancellation of a 20% tax on exports out of
At the end of 2016, China suddenly removed graphite and
magnesia from the export tax list, creating confusion in the
market. In the absence of any official government statement,
producers, exporters and traders were initially uncertain as to
whether the tax had actually been cancelled and whether such a
move would have any impact on the already depressed market.
China-based graphite producers decreased their prices by
10-15% at the beginning of January, while uncertainty remained
about the new policy.
However, the environmental tax which was also introduced at
the end of 2016 started to take effect on prices shortly after
the initial dip, meaning that they soon came back up as supply
The Environmental Protection Law was intended to tax
companies that flout environmental measures and in January the
Chinese government intensified its pollution crackdown.
The measure was announced on December 25, 2016, by Chinese
President Xi Jinping and is due to come into effect on January
1, 2018, replacing the current pollutant discharge fee.
While at first glance the new law is similar to the system
it replaced, it is more likely to be implemented as local
governments can no longer intervene on the behalf of
Particular focus was given to updating and expanding the
graphite and refractories industry in China.
In February, officials from Heilongjiang province announced
that there would be a push to enlist graphite as the new pillar
industry of the local economy for the sector to develop
Also in February, Zibo’s municipal government,
in China’s Shandong province, announced a plan to
upgrade its refractory industry in its Zhoucun district by
reducing capacity and steering existing production towards
high-end and added-value materials.
Zibo will establish a high-end refractory industrial park in
Wangcun town, with an annual capacity of up to 300,000 tonnes,
and a dedicated logistics area, covering a total 2.37 km2.
The plan requires the district’s refractory
capacity to be cut by 50% by the end of 2017 from 2015 levels.
By 2020, it is expected that new products will account for over
80% of total production value.
Particular focus will be paid towards developing materials
that follow a number of selected standards such as a low
pollution footprint, long economic life, lightweight and
Operations that fail the assessments will be closed by the
end of June, the government said, and those who will not join
in in the industrial park initiative will have their capacity
In Deyang city, Sichuan province, one refractory company was
forced to shut down while 12 others were asked to rectify their
operations, the local government announced at the end of a
month-long period of environmental inspections.
Government inspectors returned to Shandong for a second round
of checks in May, making production at local graphite
operations run intermittently, as limitations to
acid-purification processes affected high-purity and plus
mesh sizes in particular.
Renewed environmental controls in China’s
Shandong province thus prompted an increase in graphite prices,
with production of high-purity material and plus mesh sizes
particularly affected by the inspections.
In Jixi city, graphite producers came together to announce a
mutually-agreed increase in graphite prices, which they said
was needed on the back of fast-rising costs affecting
At least seven producers in Jixi stamped a jointly-issued
price increase notice, formally announcing their allegiance and
combined effort to capitalize on the tightening supply
situation that has brought about the recent appreciation seen
in graphite prices.
In another graphite producing area, meanwhile, mining
activity ended earlier than expected.
"Graphite mines in Luobei are shut down due to mine safety
standards failing to meet the guidelines required by the local
safety inspection bureau. We don’t know when they
will be reopened," one local producer told Industrial
Imports from other countries into China increased. Between
January and June, China imported 525 tonnes flake graphite
from Madagascar. Last year, China imported 181 tonnes from
Madagascar and 207 tonnes from Tanzania. This trend was
expected to increase.
ThyssenKrupp and Tata
Towards the end of the year, steel majors Tata Steel and
ThyssenKrupp agreed to set up a joint venture to combine their
European steel activities.
Each company will have a 50% share in the new venture, to be
called Thyssenkrupp Tata Steel, which would be
Europe’s second-largest steel business.
The deal involves combining Tata’s plants in
the Netherlands and the UK with ThyssenKrupp’s
German assets. There are also plans for Thyssenkrupp Mill
Services & Systems, a steel mill services provider, to be
included in the joint venture.
Pushing up: Good signs for graphite
- Tesla Motors said that it would be finalizing locations
for Gigafactories 3, 4 and possibly 5 "later in 2017".
- Monolithic refractory maker Calderys UK Ltd completed the
acquisition of NG Johnson Northern Ltd, a UK-based company
providing installation and engineering services to the
- US refractory products supplier HarbisonWalker
International (HWI) earmarked $30 million to set up an 80,000
tpy monolithic refractories production facility, which is
expected to be operational by early 2018.
- Imerys Graphite & Carbon completed the acquisition of
Japanese battery anode producer Nippon Power Graphite
- Solvay AG acquired the Energain high voltage lithium-ion
(Li-ion) battery technology from DuPont in
- Construction began on a new rechargeable battery factory
in Germany as Daimler follows Tesla’s lead in
expanding their electric car business vertically. The Kamenz
project, expected to go online in mid-2018, will see an
investment of some €500 million ($579 million) into
quadrupling the existing site’s production.
- All new models launched by Swedish carmaker Volvo will be
partially or completely electric from 2019.
- The Chinese city-level prefecture of Hegang plans to
double its graphite ore mining production to over 3 million
tonnes this year, according to a statement made in August.
The municipal government expects to add new production worth
over 6 million yuan ($892,794).