BREAKING NEWS | August 9, 2023
This morning, we received various emails from our supplier companies, all containing the same hot and unexpected news: Starting from August 1, 2023, China will restrict the export of Gallium and Germanium. This news is already causing turmoil in the markets. The stock of Rare Earths producing company Lynas Corporation rose by 4.68 percent at 10:30 AM – and this is even though 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 national security and the country’s interests.” Therefore, exporters will now need to obtain a special permit if they want to take these resources out of the country. However, for anyone who has been following international politics in recent months, it is clear that China’s export restriction is a response to the American Chip Act. After the U.S. used export controls to target China’s semiconductor supply, China is now initiating the next round of the conflict by imposing export restrictions on these two technology metals. We are in the midst of a trade war.
Germanium and Gallium are essential raw materials for technological advancement and a country’s defense capability. Without Germanium, there would be no internet. As a semiconductor, it is also a crucial resource for the chip industry, which is important for the military sector as well. Gallium is a technology metal that has seen a broadening field of applications in recent times. These range from green hydrogen production to integrated circuits and high-frequency components, all the way to piezoelectric micro-robots in medicine. Both metals are central to solar technology – and China holds the majority of both production and processing worldwide. For Peter Arkell, head of the Global Mining Association of China, the idea that other countries could replace China’s role in the short or medium term is wishful thinking. The restrictions hit the USA exactly where it hurts: in semiconductors and thus the country’s defense capability.
Reuters news agency expects that the announcement of supply restrictions will lead to higher prices for commodities needed for high technology. According to the manager of a Chinese Germanium producer, several customers from Japan, Europe, and the USA seem to share this view. Allegedly, they want to buy as many resources as possible until the August 1 deadline, as they anticipate longer processing times in the future. Furthermore, the price of Germanium in China has skyrocketed. The shares of some Chinese mining companies have also risen by up to 10 percent. Our advice to prevent supply shortages and potential price jumps is: Buy now.
We are not surprised by this breaking news and are well-prepared with our stocked inventories. We invite investors to share our calm approach, replenish their supplies at the old price until this evening, and wait for what is to come. Both Gallium and Germanium are offered at the old price until today, 6:00 PM. Contact us and invest in two crucial technology metals for our future, with a chance for attractive returns that are also tax-free.