Rising Prices for Gallium and Germanium Signal Supply Chain Shift

Prices set to rise but supply chains will diversify

Initially, prices are likely to rise, but the move will give foreign manufacturers a push to diversify their supply chains and move production out of China.

Gallium at 99.99% purity in China was last assessed at 1,775 yuan ($245) a kg on Monday, up 5.97% from the previous session and the highest since 16 May, Shanghai Metal Exchange data on Refinitiv Eikon showed.

China's germanium ingot price was last seen at 9,150 yuan ($1,264) per kg on Monday, Shanghai Metal Exchange data on Refinitiv Eikon showed.

Higher prices will in turn increase competition by making production more cost-competitive again in countries like Japan, Canada and the US, which will in turn reduce China’s dominance in both markets. It will take time to build processing plants, but over time, the markets and supply chains will adjust.

Earlier this year, the US and the EU were reportedly considering the formation of a "critical minerals buyers club" with the goal of diversifying supplies of critical minerals and finding ways to reduce reliance on countries like China.