Chinese flake graphite imports surge y-o-y in April; competitive Mozambique materials erode export market share

China imported 14,259 tonnes of flake graphite in April, up 156% year on year, while exports fell due to cheaper available stocks from Mozambique, according to official but unconfirmed data seen by Fastmarkets.

While rising significantly year on year, imports were down 15.7% from March. Shipments to China fell month on month due to an uptick in imports in March, according to market sources. China imported 16,915 tonnes of flake graphite in March, compared with 14,735 tonnes imports in February.

Despite the month-on-month decline in April, total Chinese imports in the first four months have surged. China imported 62,730 tonnes of flake graphite in January-April 2019, up by 438% from 11,663 tonnes in the first four months of 2018.

In contrast, Chinese exports of flake graphite declined in the same periods.

In April, China exported 8,498 tonnes of flake graphite, down from 11,405 tonnes in March and 24% less year on year.

In the first four months of 2019, China exported 41,736 tonnes of flake graphite, compared with 48,225 tonnes in the corresponding period of 2018.

The trend in declining Chinese exports and rising imports is due to the growing availability of Mozambique-origin material, market sources said. Around 11,863 tonnes – or 83% – of flake graphite shipped to China in April 2019 came from Mozambique, compared with 2,334 tonnes – 52% – in April 2018.

“Materials from Mozambique are continuously squeezing China’s domestic and exported material’s market share,” a Chinese trader said.

“For flake graphite of 94% carbon, -100 mesh, the price difference between Mozambique exports into Chinese main ports and China’s export materials is around $60-70 per tonne, which has raised buying interest of Mozambique materials both domestically and abroad,” the trader added.

Since October 2018, shipments into China from Mozambique have risen significantly after a number of countries in southern Africa began production in early 2017. Africa-origin shipments of flake graphite enjoy zero import tariffs as part of the Chinese government’s policy to encourage business with the continent, according to market sources.

This has put downward pressure on graphite prices in China. Fastmarkets assessed the price of graphite flake, 94-97% C, -100 mesh, FCL, fob Qingdao, at an average of $707 per tonne so far in 2019, compared with $722 per tonne in the corresponding period of 2018.

The latest assessment was at $610-760 per tonne on Thursday May 23, unchanged from the previous week.

Flake graphite is used in the electric vehicle (EV) industry as a raw material used in the production of anode battery materials and as a refractory material in the steel sector.

According to the latest statistics from the China Automotive Industry Association, China’s production and sales of new energy vehicles were 304,000 and 298,900 units respectively in the first quarter of 2019, increasing by 1 times and 1.1 times from the corresponding period of last year.