Handelsblatt report on Noble Elements: commodity panic triggered by Chinese export controls.

We are delighted! We were featured in Handelsblatt. Right on time for the start of the Chinese export controls, the leading business newspaper in the German-speaking world quoted commodities analyst and Noble Elements Managing Director Andreas Kroll as saying, “Panic is an appropriate reaction.” The word “panic” then seemed to start making the rounds. Focus also used it in an article on the security of supply for European industry and our dependence on China for rare earths and technology metals. Panic is certainly subjective, meaning the willingness to panic depends on the individual. Moreover, with the right investment, there is no reason for it. We have observed that the prices of germanium, gallium and indium have risen significantly again since our last check on 2023-07-17. Investors in these metals are therefore definitely on the right side.

Since yesterday, it has been official: the Chinese authorities can restrict the export of gallium and germanium at any time, at their discretion. Potentially, this could be a severe blow to our industry. More than 80% of the world’s available gallium and 60% of germanium come from China. Manufacturers of smartphones, mobile phones, laptops, solar panels and military infrastructure are absolutely dependent on these two technology metals, and even the automotive industry is affected. For investors, however, the potential scarcity creates opportunities.

Since the announcement of the export controls on 2023-07-03, we have been tracking the price performance of gallium and germanium. The dollar price of gallium has risen by 16.4% since then. This means the metal has gained significantly again since our last check on 2023-07-17, when it was still at 13.81%. Germanium has also risen in price again, continuing its upward trend: on 2023-07-17, the metalloid recorded a price increase of 4.68%, which rose to 6.5% by 2023-07-31. The clear winner in terms of price gains is the “free rider” indium: the “silver of the digital transition” is part of many technologies in which the other two industrial metals are also used. Between 2023-07-03 and 2023-07-31, it impressed with a price increase of 18.1%.

The reason for the rising prices was presumably the stockpiling by many industrial customers. Michael Harz, Managing Director of Freiberger Compound Materials, whose company supplies German firms with gallium products, experienced it on the front line: “My customers are not taking this calmly at all. There is now a flood of orders to increase inventories. The industry is very nervous.” The company’s gallium comes almost exclusively from China. Stocking up in good time to be prepared for all eventualities is the order of the day.

The rally in indium, gallium and germanium has only just begun. We are currently seeing a growing number of purchase inquiries, but we still have stock of all three metals in our warehouse. Industry cannot do without these metals and must consider security of supply. As a result, demand for these three production-critical metals is increasing, which is highly likely to lead to further price increases. Investors therefore continue to have the opportunity for attractive tax-free returns. Do not wait—invest now in one of the most interesting asset classes.