China’s germanium, gallium exports fell down to zero after July’s restrictions
- September 20, 2023
- Posted by: Quatro Strategies
- Categories: China, Mining & Metals, Sanctions & Regulation
In August, China reported a sharp drop in exports of germanium and gallium products to zero, as shown by customs data. This significant decline is a result of new export controls imposed on these chipmaking metals. The data reveals that China did not export any wrought germanium or gallium products in August, compared to notable export volumes in previous months.
In July, China introduced restrictions on the export of eight gallium and six germanium products, effective from August 1. These measures are part of an ongoing trade tension with the United States concerning access to materials crucial for manufacturing high-tech microchips.
The new regulations require exporters of germanium and gallium products to obtain an export license for dual-use items and technologies, including those with potential military and civilian applications.
The permit application process takes about 45 working days to complete, causing a halt in exports as traders and producers wait for authorization. Consequently, the spot prices for gallium metal in China experienced a decline last month due to accumulating stocks in the domestic market following the export controls and subdued demand.
Specifically, the spot price of gallium metal dropped by 9% in August to 1,655 yuan per kg by the end of the month. On the other hand, the spot price of germanium ingot increased slightly by 1% during the month to reach 9,700 yuan per kg at the end of August. This price hike was likely supported by a tightening supply in the market.
Looking at the broader picture, China’s exports of wrought germanium in the first eight months of 2023 totaled 36.45 metric tons, representing a 58% increase compared to the same period in the previous year. Conversely, shipments of wrought gallium experienced a significant drop of 58% year-on-year, totaling 22.72 tons over the January to August period.
These developments reflect the impact of the export controls on these critical materials for chip manufacturing.
By QUATRO Strategies International Inc.
QUATRO Strategies International Inc. is the leading business insights and corporate strategy company based in Toronto, Ontario. Through our unique services, we counsel our clients on their key strategic issues, leveraging our deep industry expertise and using analytical rigor to help them make informed decisions to establish a competitive edge in the marketplace.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
China steel margins vanish as ore, coal costs rebound
China’s steelmakers just enjoyed their best quarter in a year, and it already looks like the reprieve is over. Lower input costs and a burst of export orders lifted results at names like Baoshan and Maanshan through the third quarter, but the underlying equation has flipped again. Iron ore has strung together a fourth straight monthly rise and coking coal is back near one-year highs, squeezing the thin margins that briefly reappeared.
Profitability is shrinking across the board: electric-arc furnace operators remain in the red given high power and scrap costs, and integrated mills are watching spot margins on rebar, hot-rolled coil and billet drift toward zero. With October’s manufacturing PMI slipping further into contraction, even as construction saw its seasonal bump, the domestic demand backdrop doesn’t offer much shelter.
India set to offer $5 billion in incentives to boost domestic electronics production
India is preparing to offer up to $5 billion in incentives to encourage local production of key components for electronics, such as mobile phones, laptops, and other gadgets, in a move aimed at reducing dependency on imports from China. The country’s electronics manufacturing has grown significantly in recent years, reaching…
U.S. backs bid for Kazakh tungsten in direct contest with China
Washington is quietly trying to pry open one of the world’s largest undeveloped tungsten troves in Kazakhstan, backing a U.S. bidder in a contest that pits it directly against Chinese state-linked rivals. The effort, shepherded by Commerce Secretary Howard Lutnick and routed through agencies like the International Trade Administration, the U.S. International Development Finance Corporation and EXIM, signals an unusually hands on approach to securing a metal the Pentagon treats as mission critical.
The proposed structure is straightforward: Cove Kaz Capital would form a joint venture with Kazakhstan’s sovereign wealth fund to develop the Upper Kairaktinskoye and North Katpar deposits, build processing inside Kazakhstan, and ship product to the U.S. for defense and commercial use. What’s novel is the level of U.S. governmental advocacy in an active bidding war, a posture typically reserved for private dealmakers.