EM ASIA CREDIT: Korea Battery Makers: Downsides on graphite tariffs
"*US COMMERCE ISSUES PRELIMINARY RULING ON CHINA GRAPHITE DUMPING" - BBG
Yesterday the U.S. Commerce Department issued a preliminary 93.5% anti‑dumping duty on anode‑grade graphite imported from China. When layered over existing tariffs, some analysts model effective landed tariffs c. 160%, implying a material input‑cost shock for U.S.‑based EV cell makers such as LG and SK On.
Why it matters: Graphite is a critical EV input - it serves as the anode, the battery’s negative electrode, where lithium ions are stored during charging and that also allows for easy and efficient energy release when required. This store‑and‑release cycle can repeat thousands of times with minimal energy loss.
Supply concentration: According to Bloomberg, the U.S. imported 180,000 metric tons in 2024, of which two-thirds from China. The U.S. Commerce Department findings indicate China sells graphite below market value, hindering development of graphite supplies domestically.
Credit angle: According to the Korea International Trade Association, South Korea sourced around 98% of its graphite from China. Therefore we see near‑term risks to Korean‑backed U.S. gigafactories (LG Energy Solution/GM Ultium; SK On/Ford BlueOval; Samsung SDI/Stellantis StarPlus) where higher tariffed graphite input costs could compress margins unless passed through to OEMs.
Relative beneficiaries include graphite suppliers, such as POSCO Future M and emerging non‑China processors (Westwater, Syrah‑Vidalia, Vianode).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
ASIA STOCKS: Outflows Continue, Taiwan the Exception
After a strong period of inflows, recent days have seen outflows beginning whilst Taiwan enjoyed a sizeable inflow yesterday.
- South Korea: Recorded outflows of -$59m yesterday, bringing the 5-day total to +$286m. 2025 to date flows are -$7,987. The 5-day average is +$57m, the 20-day average is +$169m and the 100-day average of -$80m.
- Taiwan: Had inflows of +$298m as of yesterday, with total inflows of +$1107 m over the past 5 days. YTD flows are negative at -$10,104. The 5-day average is +$203m, the 20-day average of +$74m and the 100-day average of -$95m.
- India: Had outflows of -$308m as of the 16th, with total outflows of -$390m over the past 5 days. YTD flows are negative -$10,928m. The 5-day average is -$78m, the 20-day average of -$91m and the 100-day average of -$83m.
- Indonesia: Had inflows of +$16m yesterday, with total inflows of +$24m over the prior five days. YTD flows are negative -$2,927m. The 5-day average is +$5m, the 20-day average +$8m and the 100-day average -$29m.
- Thailand: Recorded outflows of -$19m as of yesterday, with outflows totaling -$147m over the past 5 days. YTD flows are negative at -$2,275m. The 5-day average is -$29m, the 20-day average of -$26m and the 100-day average of -$21m.
- Malaysia: Recorded outflows of -$12m as of yesterday, totaling -$121m over the past 5 days. YTD flows are negative at -$3,663m. The 5-day average is -$31m, the 20-day average of -$29m and the 100-day average of -$23m.
- Philippines: Saw no flows yesterday, with net outflows of -$47m over the past 5 days. YTD flows are negative at -$564m. The 5-day average is -$10m, the 20-day average of -$17m the 100-day average of -$5m.
CHINA: Bond Futures Trend Lower
- China's bond futures are trending lower today as the major equity bourses struggle.
- The 10YR bond future is down -0.03 at 109.11 and remains above the 20-day EMA of 108.92.
- The 2YR bond future is down -0.005 at 102.53 and is near the mid-point between the 100-day EMA of 102.62 and the 50-day EMA of 102.50.
- The 10YR CGB is stable at 1.69%
FOREX: JPY Crosses - Fail To Extend Their Attempts To Break Higher
With the odds of the US becoming involved in the war against Iran increasing everyday, the upward momentum of US equities seem to be stalling. ESU5 -0.48%, NQU5 -0.52%. With positioning extreme, USD/JPY has uncharacteristically remained better bid. The JPY has fared better in the crosses as the move higher in many of them stall.
- EUR/JPY - Overnight range 166.71 - 167.61, Asia is trading around 166.90. The move higher ran into some supply around the 167.50 area overnight, stalling its upward momentum. Dips look likely to remain supported for now, with first support seen back towards the 165/66 area.
- GBP/JPY - Overnight range 194.92 - 196.62, Asia trades around 195.00. GBP/JPY had a failed break above the multiple tops around 196.50, it is trading back within its 192.00 - 196.50 range support seen initially toward 194.00.
- NZD/JPY - Overnight range 87.29 - 87.99, Asia is currently dealing 87.45. NZD/JPY failed to break back above 88.00 overnight, a sustained break is needed above here for the market to turn its focus back to the 90.00 area.
- CNH/JPY - Overnight range 20.1063 - 20.2278, Asia is currently trading around 20.1950. CNY/JPY trades sideways for now in a 19.70 - 20.30 range.
Fig 1 : GBP/JPY Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
