Battery Material Maker Stocks Jump as US Eyes 93% China Duty
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Battery material makers’ stocks climbed as the U.S. set to impose preliminary antidumping duties of 93.5% on graphite imports from China.
Shares of Australian graphite miner Syrah Resources surged as much as 38%, while shares of South Korea’s Posco Future M Co. climbed 24%. Novonix Ltd., an Australian-listed company with a graphite production plant in Chattanooga, Tenn., surged 21%. Gains in these and other Asian stocks tracked earlier jumps in Canadian peers, including Nouveau Monde Graphite.
The Commerce Department issued the preliminary determination July 17, and a final plan should be announced by Dec. 5. The U.S. determined that China, which dominates the processing capacity of graphite, had been unfairly subsidizing the industry.
Graphite is a key raw material in the anodes of electric vehicle batteries. About two-thirds of the material imported by the U.S. still came from China last year, according to BloombergNEF, even though China strengthened export control on some categories of graphite since 2023. The U.S. has sought to encourage EV makers to be less reliant on Chinese components with subsidy-qualifying measures under its Inflation Reduction Act.
“I think this is going to change behaviors and sourcing strategies of battery manufacturers in the United States,” said Michael O’Kronley, CEO at Novonix. “The cost of graphite imported from China is going to go up. This ruling essentially is going to accelerate some of those discussion we have with manufacturers.”
The new duties will add to existing rates making the effective tariff 160%, according to the American Active Anode Material Producers, the trade group that filed the complaint. China currently dominates the processing capacity of graphite, with the International Energy Agency in a report in May calling the material one of the most exposed to potential supply risks.
“Expectations of IRA benefits coupled with U.S.-China decoupling are boosting investor sentiment and driving up the share prices of related companies,” said Namho Kim, general manager of Timefolio Investment Management in Seoul. “Battery material companies with lower reliance on China will emerge as key beneficiaries.”
Chinese suppliers including Hunan Zhongke Electric Co. and Jiangsu Baichuan High-Tech New Materials Co. traded slightly higher early July 18.
“The U.S. is likely to be promoting the development of its own graphite industry by forcing domestic battery makers to switch suppliers,” said Eugene Hsiao, head of China equity strategy at Macquarie Capital. “Thus upstream suppliers of Chinese graphite anodes are more likely to be impacted.”
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