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China’s Sharp Decline in Graphite Exports to Japan Sparks Urgency for Diversified Import Strategies

China’s exports of graphite and related products to Japan decreased by over 40% in December compared to the previous month on a quantitative basis, according to trade statistics released Saturday by Chinese customs authorities.

Graphite is an essential material for lithium-ion batteries used in electric vehicles (EVs), and China, which accounts for about 65% of the world’s production, introduced export restrictions in December. Japan, which depends on China for 90% of its graphite imports, likely needs to urgently diversify its procurement sources.

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According to The Yomiuri Shimbun’s tally based on the trade statistics, China’s overall export volume of graphite and related products decreased by 20%. Of this, exports to Japan decreased by 42%, and to the United States by 20%.

Even in terms of monetary value in RMB, there was a 25% decrease, with exports to Japan falling by 59% and to the United States by 15%. It is believed that the reduction was a reaction to Japanese companies increasing imports to secure stock after the Chinese government announced the introduction of regulations in October. The regulations target graphite and related products that meet certain requirements of purity and strength. There were items which had their exports to Japan and the U.S. drop almost to zero.

In August, the Chinese government also strengthened export controls on gallium and germanium, which are essential for advanced semiconductors, and exports to Japan have continued to decrease significantly. The Chinese Commerce Ministry states that this series of regulations is not targeted at any specific country or region, but they are seen as countermeasures against export controls in advanced semiconductor fields by Japan, the U.S., and Europe.

The Japan-China Economic Association, made up of major Japanese companies, is planning to send a delegation to Beijing on Tuesday to request a review of the regulations from the highest leadership.


Source: The Japanese News

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