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Anode makers fear China graphite supply squeeze

30 Jan 2018 17:41 GMT
Anode makers fear China graphite supply squeeze

Frankfurt, 30 January (Argus) — China's rising demand for natural flake graphite for use in battery anodes could lead to supply bottlenecks in Japan and South Korea, delegates to the Advanced Automotive Battery Conference in Mainz, Germany said today.

China is the dominant miner of graphite. But it is expected to switch from net exporter to net importer over the next few years as its production of anodes rises, constraining supply to anode operations in Japan and South Korea, Australia's Syrah Resources market analysis and economics manager Luke McFadyen said. Environmental regulations in China also caused a reduction of natural flake supply last year, he said.

Syrah — which mines graphite in Mozambique — estimates 75-80pc of natural flake graphite comes from China, and said some of its customers in the wider Asia-Pacific fear a crisis similar to that in the rare earths market in 2010, when dominant producer China shut off supplies to the outside world causing global prices to surge higher.

Synthetic graphite is becoming increasingly attractive as an alternative to natural graphite, but costs to anode producers remain up to one third higher, McFayden said.

New production of lithium metal that can be used as an alternative or added substance might also come on line. But this could take time, as production of lithium metal remains far lower than carbonate or hydroxide. "We stopped producing lithium metal 10 years ago, but if batteries require it for anodes then we may need to rethink this," Chilean producer SQM senior analyst Emilio E. Bunel said.

Lithium metal tends to be viewed as a possible cathode material in solid-state rather than liquid electrolyte battery technologies, limiting possibility for replacing graphite in these types of EV battery.

But US-based producer FMC is researching anode technologies that utilise lithium metal powders to improve the lifespan of batteries. "The lithium metal anode is the key to success — in solid-state battery technologies at least — and we are seeking to build commercial relationships centred around this," global commercial manager for new product development Marina Yakovleva said.