China’s Gallium Expansion Slows as Germanium Supply Diversifies: Key Market Insights

China Nonferrous Metals Industry Association (CNMA)

The Chinese gallium (Ga) production expansion has encountered significant hurdles, while germanium (Ge) supply sources are increasingly diversifying to mitigate feedstock shortages. According to Li Yilan, a senior analyst at the China Nonferrous Metals Industry Association (CNMA), the pace of new gallium production projects in China has slowed due to decreasing Ga content in bauxite, the primary feedstock for gallium extraction. As a result, many production projects have been delayed, and some that did launch have scaled back or halted operations altogether. However, the diversification of germanium supply chains signals a shift in how the industry is adapting to global demand pressures.

Slowdown in Gallium Production Expansion

China’s gallium output for 2024 is forecast to reach 950 tons, a 14% increase compared to the previous year. Despite this increase, the growth rate of gallium production capacity has slowed considerably. In particular, China’s gallium capacity rose by 40% this year, but the full realization of this capacity has been hindered by difficulties in securing sufficient feedstock from bauxite. The lower Ga content in bauxite has made it harder for producers to maintain a consistent supply of gallium, forcing many projects to delay their timelines or reduce output.

The demand for gallium, particularly from the magnet manufacturing sector (which consumes 46% of the metal), has increased gradually over the past two years. Additionally, the rise in demand for gallium oxide phosphor in electronics has offset the reduced demand from the solar cell sector. This demand shift has been a key factor in the slight increase in Chinese gallium exports, which rose by 35% year-on-year in the first three quarters of 2024, totaling 48.4 tons. This increase is partly due to disruptions in last year’s exports caused by the country’s export control schemes, which limited overseas shipments.

Germanium Supply Diversification and Emerging Markets

While gallium production faces slowdowns, germanium’s supply chain is showing signs of diversification, especially as producers look beyond China for feedstock. Tight feedstock availability in China has prompted several producers to seek alternative sources for germanium. Notably, the Democratic Republic of the Congo’s state-owned mining company, Gecamines, has begun exporting germanium concentrates to Belgium. This move is part of a broader trend of extracting germanium from non-traditional sources, such as copper-cobalt ores in the Congo and coal and nickel in Indonesia. These new extraction routes are expected to increase the overall supply of germanium.

China’s germanium output is projected to exceed 200 tons in 2024, up from 190 tons the previous year. Strong demand from the infrared and solar cell sectors, which use germanium in various applications, has driven prices upward in recent months. However, the rapid rise in prices has caused a significant drop in exports. Between January and September 2024, China exported just 18.8 tons of germanium, a 46% decrease compared to the same period in 2023. Higher prices and more stringent export license procedures have pushed international buyers to explore other sources for germanium, further boosting the trend toward diversified supply.

Conclusion

The global markets for gallium and germanium are undergoing significant shifts, with production challenges in China affecting gallium’s expansion and leading to a diversification of germanium supply chains. While gallium demand remains steady, especially from magnet and phosphor industries, production issues are slowing the pace of growth. On the other hand, germanium's increasing extraction from countries like the Democratic Republic of the Congo and Indonesia is easing the reliance on Chinese supply. The metal markets are adapting, and these dynamics will likely continue to influence pricing and production trends in the coming years.