NEWS | July 24, 2024
Resource panic in Handelsblatt due to Chinese export controls. Price for Germanium, Gallium, and Indium continues to rise, sparking a price rally not only for Gallium and Germanium.
We are thrilled! We have been featured in Handelsblatt. Just in time for the start of Chinese export controls, the most important economic newspaper in the German-speaking region quoted the commodity analyst and Noble Elements CEO Andreas Kroll, saying, “Panic is an appropriate reaction.” The word “panic” seemed to catch on, and even Der Fokus used it in an article about the supply security of the European industry and our dependency on China for rare earths and technology metals. Panic is certainly subjective, meaning its presence depends on the individual. Moreover, with the right investment, there is no reason to panic. We have observed that the prices for Germanium, Gallium, and Indium have increased significantly since our last check on July 17, 2023. So, investors in these metals are definitely on the right side.
You can read the Handelsblatt article here.
Export controls now in effect.
Since yesterday, Chinese authorities can restrict the export of Gallium and Germanium at their discretion. This could potentially be a severe blow to our industry. Over 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 heavily dependent on these two technology metals, and even the automotive industry is affected. However, for investors, this potential scarcity presents opportunities.
“Free rider” Indium surpasses Gallium and Germanium.
Since the announcement of export controls on July 3, 2023, we have been monitoring the price development of Gallium and Germanium. The dollar price of Gallium has increased by 16.4% since then, showing further growth from the 13.81% recorded in our last check on July 17, 2023. Germanium has also experienced a price increase, continuing its previous upward trend. On July 17, 2023, the semi-metal had a price increase of 4.68%, which further rose to 6.5% by July 31, 2023. The absolute winner in price gains is the “free rider” Indium: The “Silver of the Digital Revolution” is part of many technologies in which the other two industrial metals are also used. From July 3, 2023, to July 31, 2023, it has seen a price increase of 18.1%.
Industrial customers are buying up inventories.
The reason for the rising prices is likely the hoarding by many industrial customers. Michael Harz, the CEO of Freiberger Compound Materials, whose company supplies German firms with Gallium products, has experienced this firsthand: “My customers are not taking this lightly at all. There is now a flood of orders to increase inventories. The industry is very nervous.” The company’s Gallium is almost exclusively sourced from China. Being prepared and stocking up in advance is the order of the day.
Investing is still worthwhile.
The rally of Indium, Gallium, and Germanium has just begun. We are currently experiencing an increasing number of purchase inquiries but still have stocks of all three metals in our warehouse. The industry cannot do without these metals and must consider their supply security. As a result, the demand for these three production-critical metals is growing, likely leading to further price increases. Investors still have the opportunity for attractive tax-free returns. Don’t wait; invest now in one of the most exciting asset classes.