Fastmarkets: Viability of Developing Non-China Anode Ecosystem 

Harry Minnis
June 27, 2025

On Day 4 of the Fastmarkets Lithium & Battery Raw Materials Conference 2025, a panel featuring Stacey Newstead (CarbonScape) and David Christensen (Renascor Resources) discussed one of the graphite industry’s most common questions: Can a viable anode ecosystem be developed outside of China?

China: Low Prices, High Barriers

A consistent theme this week has been China’s continued dominance in the graphite market.

We’re seeing Chinese companies shifting heavily toward low-cost synthetic production, creating a price environment that makes it virtually impossible for Western players to compete, on both the natural and synthetic side, even as many anode players in China are operating at negative margins.

“The current situation isn’t sustainable,” Christensen said. “But it’s not replicable outside China either.”

With buyers able to secure graphite at cheaper prices from China, at the moment there’s little incentive for OEMs to qualify new suppliers. Coupled with opaque pricing and weak market transparency, creates major obstacles for new entrants trying to enter the market. Until there’s a disruption, whether driven by policy, geopolitics, or supply instability, the status quo holds. And right now, that status quo still heavily favours China.

Funding Gaps

Newstead highlighted how U.S. government grant cycles can be lengthy, forcing startups to survive years without meaningful backing. And the cost of pursuing public funding, including lobbying, business development, and stakeholder engagement, can overwhelm early-stage companies already stretched thin.

Christensen added that while Australia and the U.S. have introduced support mechanisms, most serious capital has flowed into battery and EV manufacturers – not upstream or midstream graphite players.

To Partner with China – or Not?

One of the most compelling parts of the discussion – and one that isn’t talked about enough – centred on whether Western companies should partner with Chinese firms.

Newstead argued that in some cases, there’s strategic value: “China spent 15–20 years perfecting this – why assume we can replicate that in 12 months?” But she drew a clear line: while partnering to learn and access technical know-how may have merit, equity investment or transferring IP into China poses significant risks – especially given today’s geopolitical climate.

Christensen emphasised that in Australia, partnerships with Chinese entities face major hurdles – from political resistance to regulatory roadblocks.

So what’s the real takeaway for the West when it comes to collaboration with China? Technical collaboration may have its place – but equity investment or downstream involvement remains politically sensitive and complex.

Rethinking What a Resilient Supply Chain Means

Looking ahead resilience won’t come from market forces alone.

Competing with China on price alone is a dead end, instead, Western markets may need to adopt a parallel pricing structure that reflects different cost bases and avoids being undercut by subsidised Chinese material. Policy support should combine incentives and strategic protections to encourage long-term capital investment in midstream capacity.

Newstead pointed to the critical funding gap that still exists between lab-scale progress and commercial readiness. She emphasised the need for early-stage, non-dilutive government funding to help emerging players survive the long lead times required for qualification and scale-up.

If Nothing Forces Change, Nothing Will

Being here on the ground at the Fastmarkets Battery Raw Materials, one thing has stood out: everyone knows the graphite market is under pressure right now and no one’s questioning the long-term need for ex-China supply.

There’s broad recognition that demand for non-Chinese anode material is only going to grow, and that today’s pricing environment, driven by oversupply and unsustainable margins, simply can’t hold.

What’s striking is that the fundamentals are there in theory, strong demand, growing urgency, and clear policy signals, and the capability to deliver at scale is starting to emerge. But for now, OEMs still have options, and those options are in China. With low prices, proven supply chains, and qualified product, there’s little commercial incentive to switch, even if the long-term risks are well understood.

That’s the gap. And without real disruption or policy-led intervention, the system has little reason to change.

And that’s the real issue.