Since 2020, the metal gallium market has gradually recovered, and the price recovery is more rational. The average price of gallium in the domestic market from January to November was 1109.26 yuan / kg, up 6.5% year on year. On December 10, Antaike quoted 1600-1650 yuan / kg, up 62% compared with the beginning of the year. The main producers reported that the price of gallium was relatively stable this week, and the price quoted by the main enterprises was about 1750 yuan / kg. From the current market sentiment, we are optimistic about the future trend. Recently, the global small metals forum 2020, sponsored by China Nonferrous Metals Industry Association and hosted by Antaike, was held in Qingyuan, Guangdong Province. At the meeting, major enterprises expressed their hope that the price performance is rational, and that excessive speculation and ups and downs are not allowed. Otherwise, the whole gallium industrial chain will be harmed, which is not conducive to the healthy development of the industry. This has been a painful lesson in the past. The recovery of gallium price since 2020 is supported by fundamentals. On the one hand, demand has entered the channel of sustained growth. The demand from the magnetic material field is the main driving force. The demand for magnetic materials such as new energy vehicles, wind energy, frequency conversion air conditioning, etc. is growing explosively, driving the rapid growth of gallium demand, especially since the second half of the year. The demand in 5g also shows good growth momentum. On the other hand, the supply is tight in stages and regions. In the past few years, the supply side structural reform has led to a significant decline in the operating rate of gallium production enterprises and a significant inventory digestion. Since last year, the operating rate has been gradually rising. However, due to changes in the supply structure of raw materials, the technical process is not suitable, and the production fluctuates or even stops production, leading to the reduction of local supply or the change of channels, resulting in the mismatch between supply and demand. Looking forward to 2021, gallium demand is expected to continue to maintain a good growth trend, driven by demand, the gallium industry will be able to extricate itself from the operating difficulties. However, it is necessary to be vigilant that the output is rebounding, and the maladjustment of gallium extraction technology and the reduction of production caused by the increase of imported bauxite proportion may be phased or short-term. With the increase of alumina production, there is little suspense about the growth trend of gallium production. In addition, the amount of secondary resource recovery can not be underestimated. Price is the main factor of gallium production fluctuation, and also the main factor of consumption fluctuation. Consumption is often more sensitive to price. Previous experience and lessons show that domestic gallium production capacity is easy to be overcapacity, and the potential growth capacity of production is large. If the price rises excessively, it will not only stimulate the rapid recovery of domestic supply, but also stimulate foreign enterprises to resume production. In the past 10 years, almost only China produced primary gallium in the world. If the price rises to about 300 US dollars / kg (2000 yuan / kg), it is estimated that foreign enterprises will consider resuming production. The European Union, the United States and Japan have listed gallium as a key mineral. In the future, it will develop production, strengthen recovery, and strengthen the application of substitution. The sustainable development of China's gallium industry lies in the formation of a community of common destiny in the upstream and downstream, and vigorously opening up domestic and foreign terminal application markets with a global vision.
This article comes from Antaike research