Korean battery-makers under cost pressure as US targets Chinese graphite

Korea Herald

3 days ago

Korea's battery industry is bracing for a sharp rise in US manufacturing costs as Washington moves to slap a 93.5 percent anti-dumping tariff on Chinese graphite, with many global supply chains still heavily dependent on China.
According to a Bloomberg report on Thursday, the US Department of Commerce has issued a preliminary ruling to apply anti-dumping duties on imports of the key anode material used in electric vehicle batteries.
Once imposed, imported Chinese graphite with 90 percent or higher carbon purity — whether natural, synthetic or blended — could face effective tariff rates of up to 160 percent, considering existing countervailing duties. A final determination is expected by Dec. 5.
Chinese companies supply over 90 percent of the world's graphite, which makes up about 95 percent of the anode in EV batteries. The new US tariffs could nearly double the material cost in the US.
Battery anodes account for about 7 percent of an EV battery's cost, and media reports say the new tariffs could add $1,000 to US-made battery prices, potentially pushing up EV prices.
The resulting uncertainty adds pressure to Korean battery-makers expanding their US production lines to qualify for incentives, such as EV tax credits, under the Inflation Reduction Act and the Advanced Manufacturing Production Credit.
LG Energy Solution, Korea's largest battery-maker, currently operates three plants in the US, including two through a joint venture, and is constructing four more. Samsung SDI operates two US-based plants, and SK On is building two joint venture factories in addition to its existing US plant.
The industry is already under pressure as it awaits a possible early termination of IRA tax incentives this September, which adds further uncertainty to their performance.
Shares of Korean battery material producers surged in early Friday trading amid expectations of growing demand for a China-independent anode supply chain.
Posco Future M, Korea's leading battery materials supplier, saw its stock price jump by as much as 24 percent on the benchmark Kospi, before settling at 156,300 won ($112) as of 12:15 p.m., up 19 percent from the previous day's close.
The company ranked 11th in the global anode market last year with a 1.3 percent share, trailing 10 Chinese firms. Posco Future M reportedly operated its anode production facilities at only around 30 percent capacity by the end of the year, as low-cost Chinese products continued to undercut prices.