The Chinese graphite market is expected to hold firm in the near term amid a fall in production because of harsh weather conditions.
Low winter temperatures have prompted many graphite producers to reduce production, particularly in north China, leading to a shortage of supply on the spot market.
Most domestic producers of graphite flake, the main negative material used in lithium-ion batteries, are located in the country's northwest Heilongjiang province and the north Inner Mongolia region.
Spot availability has remained tight because of the lower production rates, although many consumers increased their purchases in November to build up inventories.
Argus launched two price assessments for graphite flake on 18 December. The range for 94pc grade material was assessed at 4,100-4,600 yuan/t ($595-668) ex-works, while export prices were stable at $700-800/t fob.
Rising production
Chinese graphite producers have been raising their production in the last few years as they look to meet growing demand from the lithium-ion battery industry.
The rapid growth in electric vehicle (EV) production has encouraged graphite negative material manufacturers to boost output. The country is on target to produce more than 1mn EVs this year and 2mn in 2020.
Domestic production rose by 23.7pc in 2017 from a year earlier to 146,000t, in response to a 27pc growth in the country's lithium-ion battery production to 80.5GWh during the same period.
Producers such as Inner Mongolia Hongfeng New Material is building a 10,000 t/yr plant, which is scheduled to be commissioned by the end of this year.
Inner Mongolia Mengji New Carbon Material is building three plants with a combined capacity of 15,000 t/yr. The new plants are scheduled to be completed at the end of this year and will raise the company's total capacity to 20,000 t/yr.
Another 10,000 t/yr project operated by Inner Mongolia Xinyuan Graphene New Technology was commissioned in February.
Inner Mongolia Hongyuan Graphene New Material is planning to build a production plant with a capacity of 10,000 t/yr in the Chahar Right Rear Banner administrative region of Inner Mongolia.
Ningbo Shanshan has signed an investment agreement with Inner Mongolia's Baotou government to spend 3.8bn yuan ($551mn) to construct a plant with 100,000 t/yr of capacity for graphite negative material.
