BREAKING NEWS: China restricts exports of gallium and germanium! – Until 6:00 PM today, the old prices remain in effect

This morning we received various emails from our supplier companies, all containing the same urgent and, for many, unexpected news: China will restrict the export of gallium and germanium starting August 1, 2023. This announcement is already causing turmoil in the markets. The stock of rare earth producer Lynas Corporation had already risen by 4.68 percent by 10:30 AM—and that despite the fact that gallium and germanium are not even part of their product range.

According to China’s Ministry of Commerce, the export controls are intended to “protect the country’s national security and interests”. As a result, exporters must now obtain a special permit if they want to take these commodities out of the country. However, anyone who has been following international politics in recent months will quickly see that the export restriction is China’s response to the US Chip Act. After America took targeted action against China’s supply of semiconductors with export controls, China is now heralding the next round of conflict with its export restrictions on the two technology metals. We are in the middle of a trade war.

Germanium and gallium are important commodities for technological progress and a country’s defense capability. Without germanium, there would be no internet. As a semiconductor, it is also a central commodity in the chip industry, which is also important for the military sector. Gallium is the technology metal with the widest range of applications in recent times. These range from the production of green hydrogen, integrated circuits and high-frequency components to piezoelectric micro-robots in medicine. Both metals are central to solar technology – and China is responsible for the majority of production and processing worldwide. For Peter Arkell, head of the Global Mining Association of China, it is wishful thinking that other countries will be able to replace China’s role in the short or medium term. The restrictions are hitting the USA exactly where it hurts: in semiconductors and therefore the country’s defense capability.

The Reuters news agency assumes that the announcement of the supply restriction will increase the prices of commodities needed for high-tech applications. If the manager of a Chinese germanium producer is to be believed, several customers from Japan, Europe and the USA seem to share this view. They allegedly wanted to buy as many commodities as possible before the deadline on August 1 because they expected future processing times of several months. Furthermore, the price of germanium in China has skyrocketed. The shares of some Chinese mining companies have also risen by up to 10%. Our advice at this point to prevent supply bottlenecks and any associated price rises is to simply buy now.

We are by no means surprised by the breaking news, but rather well prepared with our stocked warehouses. We invite investors to share our calm perspective and to replenish their supplies at the old price until this evening, awaiting the developments to come. We are offering both gallium and germanium at the old price until today, 6:00 PM. Contact us and invest in two technology metals that are important for our future, with the opportunity for attractive returns that are also tax-free.