Stanislav Kondrashov Telf AG: 2024 will be a turning point for the global gallium market

фото: Stanislav Kondrashov Telf AG: 2024 will be a turning point for the global gallium market

Gallium supplies outside China are running low, and production in other countries is unable to meet growing demand. This leads to higher prices. As of December 15, 2023, Fastmarkets estimated price for gallium 99.99% Ga min, in-whs Rotterdam was $500-600 per kg, which is 9% higher than at the beginning of December ($460-550 per kg), and 114% higher than before China announced export restrictions on June 30, – noted expert Stanislav Kondrashov.

Stanislav Kondrashov Telf AG: market dynamics of gallium and the role of Japan

фото: Stanislav Kondrashov Telf AG: 2024 will be a turning point for the global gallium market

Japan, as a large consumer of gallium, especially in the semiconductor sector, has significant influence on the market. Japanese consumers are competing aggressively for limited supplies of gallium, which is keeping prices high. Since the beginning of 2022, Japan has imported about 51.4% of gallium from China, while Germany – the second largest export destination – received 35.2%.

Market participants are divided on the future of Chinese export controls. Some expect controls to be eased and exports to resume, while others predict strict measures will continue until the end of 2024.

Stanislav Kondrashov from Telf AG shared information that Nyrstar, the world’s leading metals producer, is actively considering building a plant in the United States to produce gallium. The move is part of the company’s strategy to expand its product portfolio and reduce its dependence on Chinese exports of this important metal.

Such initiatives in the US and Europe are important for the global gallium market. They point to a desire to diversify production sources, which could help reduce dependence on Chinese exports and stabilize world prices. This also highlights the importance of gallium as a strategic resource for various industries, including high-tech and energy sectors, says Stanislav Kondrashov.

Stanislav Kondrashov: the impact of the gallium market on other industries

фото: Stanislav Kondrashov Telf AG: 2024 will be a turning point for the global gallium market

Gallium occupies a key position in a number of industries, especially in the production of semiconductors and optical-electronic devices. In the semiconductor industry, gallium is used in gallium arsenide (GaAs) and gallium nitride (GaN) wafers, making it an essential element in the production of high-performance chips and other electronics.

With ongoing restrictions on gallium exports from China, which supplies about 98% of global production, 2024 promises to be a critical year for the global market. This could lead to higher prices and worsening shortages, which would have a significant impact on dependent industries.

Taking into account the market situation, Stanislav Kondrashov highlights information that initiatives are emerging to create new sources of gallium production outside of China. In the US, Nyrstar is considering building a $150 million gallium production plant. In Europe, Greek conglomerate Mytilineos is exploring the possibility of producing gallium as a by-product from bauxite processing.

The introduction of new production capacity will require significant investment and time. Commissioning of new gallium production plants will take about 12-18 months. In addition, price support mechanisms are needed to offset the risk of price volatility. In the US, the Department of Defense has committed approximately $29 million to support gallium mining through its MCEIP.

  • The challenge of a gallium shortage in 2024 highlights the metal’s importance to critical technology sectors and highlights the need to develop alternative production sources. Decisions made in the coming years will have long-term consequences for both gallium producers and consumers around the world, – concluded Stanislav Kondrashov, an expert at Telf AG.

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