China’s push to control its exports of gallium has sent prices for the metal used in semiconductors to a 10-month high as suppliers await official approvals to ship overseas.
Chinese producers of the niche metal need permission to ship abroad under rules effective from Aug. 1. While some exporters have filed for approval, they expect the process could take several weeks, according to people with knowledge of the issue who declined to be named because the information is not public.
That’s left the global market facing a crimp on supply that could stretch beyond August — even if the exporters ultimately get approval. Gallium’s price has surged more than 50% since China unveiled its restrictions in early July, according to Fastmarkets data, pointing to a tighter market.
China unveiled curbs on gallium and another metal, germanium, last month. The restrictions — seen as part of Beijing’s tit-for-tat battle with the West over technology — spooked global buyers and prompted reactions from senior US officials. China refines about 94% of the world’s gallium, according to EU figures.
Gallium traded at $400 a kilogram on Aug. 9, the highest since mid-October last year, the Fastmarkets data showed.
The curbs have been viewed as Beijing using its dominant role in the metals to hit back at US and European efforts to stymie China’s semiconductor industry. Western governments are trying to reduce their reliance on the Asian giant for a swathe of critical minerals. Gallium is also used in Navy radar on vessels for air and missile defense and by the Army and Marines in ground-based radar for detecting rockets, artillery, mortars, cruise missiles, and aerial drones.
China exported about 80 to 90 tons of gallium metal and 50 tons of gallium oxide a year before the curbs, compared with a domestic production of about 700 tons of gallium metal, according to estimate from Shanghai Metals Market.
(Corrects estimate of China’s gallium output in last paragraph.)
