The sluggish recovery of China's gallium and germanium exports highlights our dependence

When China announced export controls on gallium and germanium last August, prices initially surged dramatically. This was primarily due to panic buying by affected companies and suppliers. We also had to ensure that we could continue to supply our customers with these technology metals, which are so crucial for industry. This proved to be a wise move, as the metals were not delivered abroad for several months. The reason was that the Chinese authorities first had to review the applications that companies had been required to complete since the controls began.

According to Chinese customs authorities, the world’s largest germanium producer exported 3,363 kilograms of germanium last month. This is significantly more than the 721 kilograms in November but far less than the 10,020 kilograms in December 2022, prior to the controls. Overall, the quantity exported in 2023 is 5.2% below that of the previous year. The situation appears better for gallium. China exported 7,030 kilograms of gallium last December. This is almost 360% more than in the previous month of November, when it was only 1,530 kilograms. However, the monthly average delivery for the past year is 3,730 kilograms, which is 52.6% below the 7,870 kilograms of the previous year. Due to the still severely limited availability of both metals in certain industries, such as high-performance electronics and photovoltaics, their prices have risen sharply. From July 2023 to the end of December, the price of gallium increased by 41.21%, while germanium became 9.8% more expensive during this period.

Since both gallium and germanium are materials for high-tech microchips, the export controls must be attributed to the escalating tensions between Beijing and Washington. These metals are “dual-use goods,” meaning commodities that can be used for both civilian and military purposes. With these controls, China is demonstrating to Western industrialized nations that they remain dependent on its commodities. The West is therefore seeking alternative supply countries. However, until these are not only found but also production-ready, several more decades of dependence could pass – certainly with continuously rising prices.