China’s Mineral Curbs Send Shockwaves Through Tech and Defense as Germanium Prices Skyrocket
Supply chains tremble as Beijing tightens its grip on critical minerals.
Tech Sector Reeling
Semiconductor manufacturers scramble for alternatives as germanium prices hit unprecedented levels. Production lines face potential slowdowns while R&D departments race to develop workarounds.
Defense Implications
Military contractors confront new vulnerabilities in weapons systems manufacturing. The strategic mineral squeeze exposes dependency risks in national security infrastructure.
Market Chaos
Traders capitalize on volatility while manufacturers absorb cost increases that'll inevitably trickle down to consumers—because when has increased production costs ever not been passed along?
Global supply chains now face their ultimate stress test as geopolitical tensions rewrite the rules of resource access.
Germanium demand overwhelms supply chains
Pressure is also building in another corner of the strategic metals market. Chinese limits on exports of germanium, a metal vital for military thermal-imaging systems found in fighter jets and other equipment, have created a sharp supply squeeze and driven prices to their highest level in at least 14 years, traders say.
Beijing announced in 2023 that it WOULD halt exports of germanium, gallium and antimony after the US and the Netherlands imposed restrictions on advanced chips and chipmaking gear.
Traders and analysts said the germanium pullback accelerated from the end of 2024. Terence Bell of Strategic Metal Investments said he has been unable to buy germanium for at least six months because flows from China have “completely dried up.” “I spent my whole summer taking 2-3 [enquiries] a day from companies looking for germanium,” he said. “It’s desperate out there.”
An analysis by Silverado Policy Accelerator found that US imports of germanium from China fell about 40% between January and July compared with the same period in 2024. Prices have soared in response.
Germanium shortage hits defense industry
On Wednesday, germanium was close to $5,000 per kilogram, up from just over $1,000 at the start of 2023, according to Fastmarkets. The September price is the highest the agency has recorded since its data series began in 2011 as reported by FT.
“Almost everybody is approaching us” and there is “panic” in the market, one executive at Tradium said, adding the company cannot fulfill “all the enquiries we’re getting.” The cutoff “devastated the ability for there to be a functioning spot market,” said Aaron Jerome, a trader at Lipmann Walton & Co. “People we used to be able to buy 100kg from, we’re lucky now if they can give us 10kg, and the price is three to four times higher.”
Germanium is not rare in a geological sense, but it is tough and costly to produce. It is usually recovered as a byproduct of zinc processing and from coal fly ash, limiting the speed at which supply can respond. Russia has been a source of the metal in the past, but sanctions following its full-scale invasion of Ukraine have added to shortages in western markets.
In August, US defense contractor Lockheed Martin announced a supply agreement with Korea Zinc. Because defense companies have often left germanium procurement to subcontractors, the MOVE was seen by traders as a sign of how tight the market has become. Fastmarkets estimates global germanium demand at about 180 to 200 tonnes a year.
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