BEIJING (Reuters) – Chinese prices of chip-making metal gallium hit their highest since February this week on stronger domestic demand and growing hopes of recovering exports, analysts and suppliers said.
China supplies more than 90% of the world’s gallium, according to the U.S. Geological Survey, but Beijing began restricting exports of the metal in August, upending global trade.
The spot price of gallium metal reached 1,975 yuan ($269.95) per kg on Oct. 18, up 18% since the start of July and up 8% since Aug. 1, data from consultancy Shanghai Metals Market showed.
Demand for the metal used in magnets and for making gallium oxide, used in semiconductors, has improved since September and producers are reluctant to compromise on prices, Li Yilan, an analyst at the state-backed research agency Antaike said in a note on Oct. 13.
Prices are also rising after Beijing began approving exports under the new restrictions. The Ministry of Commerce said last month that some Chinese companies have obtained export licences for gallium and germanium products.
“There is a wide price difference between Chinese and European markets, so sellers are expecting domestic prices to rise further after shipments recover,” said a China-based gallium supplier, who requested anonymity because he is not authorised to speak to media.
European prices of gallium metal surged by 68% from early July to $475 per kg on Oct. 18 and was up 23% from August, data from information provider Fastmarkets showed.
($1 = 7.3162 Chinese yuan)
(Reporting by Amy Lv and Dominique Patton in Beijing; Editing by Shounak Dasgupta)
