On the evening of July 3rd, the Ministry of Commerce and the General Administration of Customs issued a notice to implement export controls on gallium and germanium related items starting from August 1st. Gallium and germanium are emerging strategic minerals and important materials in semiconductors, photovoltaics, and fiber optic communication. Some experts believe that implementing export controls on these two strategic minerals is beneficial for ensuring resource security and safeguarding national interests.
As important strategic minerals, germanium and gallium have already received increasing attention internationally. Today, the "mining industry" will take you in depth to understand the detailed situation of one of the two, "germanium", and how it is priced in the international market.
The global pricing of germanium is mainly based on spot market prices, with two price centers in China and Europe. The distribution, production, and consumption of global germanium resources are highly concentrated. The global production of primary germanium products is mainly concentrated in China, with European and American countries occupying the deep processing and component product markets. China should reasonably regulate the import and export of germanium resources to ensure reasonable development and utilization.
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Global germanium pricing and market fundamentals
Currently, global germanium pricing is mainly based on spot market prices
Firstly, germanium is mainly traded in spot markets, with two price centers in China and Europe.
Germanium is a strategic rare small metal that has not yet formed a global futures market, and its pricing is mainly based on the spot market price. The spot market prices of germanium are based on the Chinese market and the Rotterdam market, and are regularly published by London Metal Herald (MB), Shanghai Nonferrous Metals Network (SMM), and Antaike (ATK).
Secondly, the price of germanium is based on market supply and demand, and the domestic and international price trends are consistent.
From 2017 to 2022, the price of germanium ingots remained below 8000 yuan/kg for a long time, and due to factors such as insufficient supply of raw materials and increased demand, they experienced two rounds of increases. In 2017, due to the dual impact of reduced supply of raw materials and germanium products in China, germanium prices entered an upward trend, and by the first quarter of 2018, the price of germanium ingots had once exceeded 10000 yuan/kg. Subsequently, due to the increase in supply of zinc concentrate raw materials and the recovery of germanium production capacity, germanium prices continued to decline. In 2019, the global fiber optic market experienced sluggish consumption, coupled with inventory auctions in the Pan Asian market, exacerbating oversupply and causing germanium prices to remain low for a long time. In 2021, the increase in global fiber optic and military market consumption offset the decline in infrared demand caused by the easing of the epidemic, and germanium prices gradually rebounded. Since 2022, the price of germanium has dropped first and then increased, showing a "V" shaped trend. Global inflation is high, geopolitical conflicts continue, economic recession concerns intensify, and demand for germanium shrinks. By the third quarter of 2022, the price of germanium ingots has dropped from over 9000 yuan/kg at the beginning of the year to nearly 7000 yuan/kg. Starting from the fourth quarter, with the improvement of military demand, rising raw material prices, and potential demand growth from future battery applications, the activity of the germanium market has increased, and germanium prices have risen again. It is expected that the price increase will continue for some time.
02 High concentration of global germanium resource distribution, production, and consumption
Firstly, globally proven germanium is mainly concentrated in the United States, China, and Russia, accounting for over 90% of the total reserves.
Germanium has geochemical properties such as iron, sulfur, stone, and organic matter, and is mainly dispersed in nature as ions in sphalerite, chalcopyrite, silver mineral, and galena