"Can't Live Because of China... US Graphite Industry Requests 920% Tariff Bombardment [Bojo, Battery]"

US Local Companies Demand Ultra-High Tariffs on Chinese Graphite
Unreasonable Claims but Uncertainty from Trump Era Persists
Diversification Needed for Graphite Supply Chain Dependent on China

Local US anode material companies have requested the authorities to impose tariffs exceeding 900% on anode materials (such as natural graphite and artificial graphite) imported from China. Given the absolute dependence on Chinese graphite, diversification of supply sources is expected to accelerate.

On the 23rd, the battery industry viewed that imposing ultra-high tariffs on graphite, as claimed by local US graphite and anode material companies, would not be easy. If such ultra-high tariffs are imposed, China could escalate its recent export restrictions on graphite destined for the US to a complete export ban.

A battery industry official said, "If an ultra-high tariff of 920% is imposed on graphite, it will ultimately become impossible to procure anode materials domestically in the US, making battery production unfeasible," adding, "Elon Musk, who will play a key role in the second term of the Trump administration, is also expected to oppose this as there is currently no alternative to Chinese anode materials." However, due to policy uncertainties under President-elect Donald Trump, there is no room for complacency.

The emergence of graphite at the center of US-China tensions indicates how vulnerable the supply chain is. According to market research firm SNE Research, China's share of the global secondary battery anode material market last year was about 93%, an absolute dominance. By company, the 'Big 3'?BTR, Shanshan, and Jichen?along with companies ranked 1st to 9th in shipment volume, are all Chinese firms. South Korea's POSCO Future M ranks 10th, the only non-Chinese company in the top 10. South Korea's dependence on natural graphite imports from China was 94.4% in 2022, making short-term substitution difficult. Whether it is lithium, nickel, cathode materials, separators, or copper foil, no other battery raw material or component is as overwhelmingly dominated by China in the supply chain.

Diversification of the graphite-anode material supply chain is inevitable. Under the US Inflation Reduction Act (IRA), electric vehicles equipped with batteries containing Chinese minerals have been excluded from eligibility for purchase subsidies. Only graphite has been granted a two-year exemption from US government sanctions, giving domestic battery companies some time, but alternative supply sources must be secured by the end of 2026. SK On signed a contract in February this year to receive natural graphite from Westwater Resources in the US. From 2027 to 2031, natural graphite produced at a refining plant in Cullman, Alabama, will be supplied. POSCO Future M has signed a supply contract with Syrah, an Australian company operating the Balama graphite mine in Mozambique, Africa.

Earlier, the Anode Material Producers Association, representing US graphite producers, submitted a petition to two regulatory authorities?the US Department of Commerce and the International Trade Commission?requesting an anti-dumping investigation into Chinese companies. Local US companies argued that anti-dumping tariffs of up to 920% should be imposed on Chinese graphite. Currently, the US tariff rate on graphite imports is 25%. Anode materials account for about 10-15% of the battery cost, which itself can be up to 40% of the price of an electric vehicle. For example, in an electric vehicle sold for 50 million KRW, the battery cost is about 20 million KRW, and the anode material cost is about 2 million KRW. Assuming a 920% tariff is applied, the anode material cost per electric vehicle would rise to 20.4 million KRW, and the electric vehicle price would increase to 68.4 million KRW, a rise of approximately 36%.