HomeFutures and CommoditiesChina's export restrictions hinder gallium and germanium shipments for second consecutive month,...

China’s export restrictions hinder gallium and germanium shipments for second consecutive month, affecting global supply.

China’s Export Restrictions on Gallium and Germanium Products Continue to Impact International Shipments

China’s Curbs on Exports Affecting Chipmaking Metals

China’s recent restrictions on the export of gallium and germanium products have significantly disrupted international shipments for the second consecutive month, according to customs data released on Friday. These measures have created a ripple effect throughout the chipmaking industry.

Germanium Exports Experience Significant Fluctuations

In August, China exported no wrought gallium products, while the following month witnessed a similar trend. This decline contrasts with the surge in July, where shipments of wrought products reached an impressive 8.63 metric tons. In September, exports of wrought germanium products amounted to only 1 kilogram, compared to zero in August.

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Uncertainty Surrounding Germanium Oxides and Zirconium Dioxide Exports

The customs data for September revealed exports of 1,420 tons under the customs code for “germanium oxides and zirconium dioxide”, indicating a slight increase from the previous month’s figure of 1,034 tons. However, it remains uncertain whether these shipments solely consisted of zirconium dioxide or included some germanium oxide.

China’s Export License Requirement Impacts Gallium and Germanium

China’s decision to impose export restrictions on eight gallium and six germanium products, effective from August 1, marks the latest escalation in the ongoing trade dispute between China and the United States. Exporters of gallium and germanium products are now required to obtain an export license for dual-use items and technologies, which encompass applications in both military and civilian sectors.

Price Trends and Market Impact

While the spot price of germanium ingot remained unchanged at 9,700 yuan per kilogram (kg) in September, the price of gallium metal experienced a 15% month-on-month increase, reaching 1,905 yuan per kg. This surge can be attributed to temporary tightness resulting from improved demand and a delay in the commissioning of new capacity.

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Export Figures Reflect Changing Dynamics

Amidst these export restrictions, China’s exports of wrought germanium witnessed a year-on-year increase of 47.4% in the first nine months of 2023, totaling 36.49 tons. In contrast, shipments of wrought gallium experienced a significant decline of 61.9% during the same period, amounting to only 22.72 tons.

It is evident that China’s export restrictions on gallium and germanium products have had a substantial impact on international shipments and the global chipmaking industry. These measures have resulted in significant fluctuations in export figures and price trends, highlighting the interconnectedness and vulnerability of the global supply chain. The long-term implications of these restrictions remain uncertain, as stakeholders navigate the challenges and seek alternative solutions.

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