Latest development in the trade conflict between China and the US in particular.
China’s export restrictions on gallium and germanium have caused international exports of these metals to fall sharply for the second month in a row. This was reported by Reuters news agency on Friday, citing customs data for September.
China’s exports of processed germanium amounted to just one kilogram in September, down from zero in August, according to the data. Previously, exports had risen to 8.63 tons in July before the restrictions came into effect due to stockpiling. The value for germanium oxide is more difficult to determine, as this raw material product is listed together with zirconia. The added value was 1,420 tons in September, compared with 1,034 tons in August.
Gallium products were not exported in August or September. By comparison, there were 5.57 tons in September 2022.
The People’s Republic dominates the global production of these raw materials, which are important for the manufacture of semiconductor chips and lasers, among other things. Since August, exporters have required export licenses for so-called dual-use goods, which are used for civilian purposes and military technology. The first licenses were issued in September (we reported).
In the run-up to the export controls, prices for both minerals had risen (we reported). In September, the price of germanium ingots remained unchanged from the previous month, according to Reuters, while the price of gallium metal rose 15 percent month-on-month. This was due in part to increased demand coupled with shortages.
Next Step in the Trade Conflict: China Wants to Restrict Graphite Exports
The export controls are seen as a reaction to the U.S. export restrictions on advanced semiconductor chips directed against China in the trade conflict between the two major powers. Now China is following suit and plans to introduce export licenses for some graphite products as well, Reuters writes, citing the country’s Ministry of Commerce. The People’s Republic is the world’s largest producer (PDF) of the critical battery metal, which plays an important role in electromobility in particular. National security is cited as the reason for the measures intended to ensure domestic supplies of graphite for military purposes and battery production, Reuters quotes an analyst as saying.
The latest export controls come at a time when Beijing is under increasing pressure over its industrial practices. A tightening of chip restrictions by the U.S. is joined by the EU’s announced investigation into China’s e-car subsidies.
According to customs data, major graphite buyers from China include Japan, the United States, India, and South Korea. The export restrictions are scheduled to take effect Dec. 1.
Photo: iStock/Igor Krasilov