Gallium Price ($US/KG)
30 August 2024 : Price $909.30
1 January 2024: Price $755.80
Financial Times says it Best – Twice in 4 days!
The first of 2x FT articles on Wednesday, August 28th, 2024 will prove to be a seminal piece of journalism. The front middle of the page is a discrete summary of the ramifications of China’s imposed export bans on key ingredients in crucial semiconductor materials. A full 12 months on from the introduced export license requirements has seen a significant reduction in gallium and germanium exports resulting in higher prices for both raw materials.
This is not an op-ed piece but a well-researched, documented, and referenced article that echoes similar trends G50 has observed over the last 12 months. We find the timing of the article especially interesting, coming fast on the heels of newly announced antimony export restrictions from China and new tariffs by Canada on Chinese-made EV’s including Tesla. The rhetoric and geopolitics of strategic minerals are ramping up just in time for US elections. Note: In the US, both major parties are uniquely bipartisan in their view of tariffs against China to support US domestic production of critical and strategic materials.
At G50 we believe the last few paragraphs provide insight into the timing of the article (highlights added by G50):
“ Markus Roas, metals business manager at Indium Corporation, a supplier to the electronics and semiconductor industries, said US companies such as his were finding it “really hard” to get export licences and that it only had “a couple of weeks” worth of germanium and gallium in stock.
“Right now, on germanium, there’s definitely a risk of running out of supply,” he added.
China’s foreign ministry declined to comment.
Combs at Trivium said Beijing regarded export controls in part as a way of securing its own supply of the materials used in clean energy technologies at the heart of the country’s industrial upgrading.
China was using the restrictions to help its efforts to catch up with the US and other leaders in semiconductor technology, said the person at the company that is a large user of semiconductor materials.
“Assuming the global situation and US-China relationship stays as it is, then I don’t see any motivation for China to relax the export controls,” the person said.”
https://www.ft.com/content/9cd56880-4360-4e11-8c22-e810d3787e88 (behind paywall)
The second of the FT’s article on gallium came out on the 31st of August 2024 in the Lex Column. Titled: “Overcoming China’s dominance in gallium will not be easy. Substituting one mineral for another takes time and money”
https://www.ft.com/content/20819d8e-5d2b-4a12-9a50-edbfd07336ef
The article makes the case that gallium is plentiful and with time and money, western world supply routes can be found. “Governments would probably have to stump up financial incentives, but cash exists for just this sort of purpose.”
In balancing that thesis the argument is made that recycling of the existing metal in the system is costly and that demand is picking up. “The growth in applications, many in defense, for gallium nitride, means demand is burgeoning. Supply may well tighten further particularly if, say, China closes off the loophole that allows US end users to buy from third-party countries such as Japan and South Korea”
Gallium is up 42% in the last 18 months and the move higher predates the Chinese export controls. Both articles are well-balanced in their reporting without diving into the details on just how difficult non-China sources of gallium is to find, extract, and deliver.
We would also highlight that as with lithium, cobalt, and rare earths…. China has a huge start on the Western world in the processing of these strategic minerals.
One article by the FT on gallium is a thought piece. Two articles in the space of just a few days make us think that something major is going on.
Go Gallium, Go Gold, Go G50 !!!
