Crisis and Opportunity: Top Ways to Trade China’s Curbs on Graphite

Oct 25, 2023

Crises can lead to opportunity.

Look at the electric vehicle battery market, for example.

Demand for batteries – and the materials to make them – are surging. All as EV sales accelerate. Unfortunately, there’s a massive supply issue that could put the brakes on it all.

According to Fast Markets, “Squeezed supply chains and looming shortages of critical metals which are key for battery manufacturing present a major risk for the energy transition as we head towards 2030.” All of which is a strong catalyst for EV battery stocks.

One of the metals facing a severe issue is graphite.

In fact, we’re now learning that China – which controls about 90% of the global graphite market – is about to curb its exports, which will only make the supply-demand issue far worse. Under the new rules, China says export permits will be needed, starting in December. All of which is forcing automakers to hunt for supply from sources outside of China.

While investors can always jump into graphite stocks, such as Graphite One or Syrah Resources, a great way to diversify at a low cost is with an ETF, such as:

The Disruptive Materials ETF (DMAT)

With an expense ratio of 0.59%, the ETF invests in companies producing metals and other raw materials, such as graphite that are essential to the expansion of disruptive technologies, such as lithium batteries, solar panels, wind turbines, fuel cells, robotics, and 3D printers.

Amplify Lithium & Battery Technology ETF (BATT)

With an expense ratio of 0.59%, the ETF invests in companies involved with the development, production and use of lithium battery technology, including: 1) battery storage solutions, 2) battery metals & materials, and 3) electric vehicles, according to Amplify ETFs.

S&P Global Core Battery Metals ETF (ION)

With an expense ratio of 0.58%, the ION ETF tracks the performance of the S&P Global Core Battery Metals Index. At the moment, ION tracks 41 stocks, including Allkem, Pilbara Minerals, Livent, Albemarle, Ganfeng Lithium, and Pacific Metals to name a few of the top ones.

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