- UK customer orders surge by up to 300%
- High-purity specialty grades affected
- Relatively low volumes fail to move prices
British companies are understood to be stockpiling natural
graphite ahead of Brexit as uncertainty mounts over trade
arrangements once the United Kingdom leaves the European
Official import data for the UK for the first three months
of 2019 has not yet been published, so volume increases cannot
be verified, but some market participants say they have seen up
to a 300% jump in orders from British customers since the
beginning of this year.
"We are not worried, but we are not sure how [Brexit] will
affect our business in the long term," one supplier
"It is having an effect right now," another market
participant admitted. "We are seeing some customers in the UK
trying to build up stocks because they don’t know
what will happen after Brexit."
The reported tonnage increases are still relatively small, in
the tens of tonnes, and the rise in demand from the UK has
not been enough to influence index prices.
Customers have mostly been stockpiling high-purity specialty
grades, sources said, including those for use in expandable
graphite applications, such as flame retardants and
Although most of this graphite originally comes from China,
it is typically brought to the UK by European trading companies
and is often warehoused in mainland Europe before being sold on
to British customers.
There has been no impact on the battery graphite supply
chain because there are no significant battery production lines
in the UK.
Traders said they had not automatically increased prices for
British customers, even though they had experienced some
difficulty in meeting their requirements at such short notice,
but noted that there had been flexibility for price negotiation
in some contracts.
"In the end, it makes no difference, because if they fill
their stocks now, they won’t fill them for the
rest of the year," one supplier said.
Not all of the UK’s natural graphite importers
have begun stockpiling, with some adopting a wait-and-see
approach, market participants noted.
At the time Fastmarkets Industrial Minerals Magazine went to
press, it seemed likely that the UK would seek an extension to
Brexit beyond the March 29, 2019, withdrawal date.
UK import tariffs on natural graphite are currently set at
0%. This is likely to remain the case even if the UK leaves
the EU without a deal under the "Temporary rates of customs
duty (tariffs) on imports after EU Exit" plan published by
the UK government on March 13, although the longer-term
situation remains unclear.