Graphite: A year in review

By Siobhan Lismore-Scott
Published: Tuesday, 26 December 2017

A roundup of the year’s main events in the global graphite market.

The year 2017 started with graphite prices ticking lower following the cancellation of a 20% tax on exports out of China.

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 was squeezed.

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 companies. 

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 swiftly.

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 functionalization.

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 capped.

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 operations.

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 Minerals.

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 refractory industry.
  • 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 (NPG).
  • Solvay AG acquired the Energain high voltage lithium-ion (Li-ion) battery technology from DuPont in February. 
  • 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).

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