European prices for gallium and germanium metal surged in June and July as China's tighter grip on export licences started to bite.
Argus assessed prices for 99.99pc gallium metal at $850-900/kg cif main airport Europe on 24 July, up by 21.5pc from the start of June and 52pc from the start of the year. Germanium prices have also risen sharply to $4,100-4,400/kg cif main airport, up by almost a third from the start of June.
Prices surged after months of lower exports from China and an uptick in buying requests from consumers and traders that are struggling to source material. China first added gallium and germanium products to its list of export-controlled dual-use items in August 2023, but has become much more strict with permitting exports so far this year.
In the first half of 2025, China exported 17,748kg of gallium metal, 9.2pc less than the 19,550kg exported in the first half of 2024. In May, exports fell to 0kg for the first time since September 2023. Of the total volume exported this year, 13,018kg, or 73pc, went to Japan, with another 2,300kg to Germany, 1,000kg to Canada, and 500kg to Slovakia.
China's germanium exports were even lower in the first half of this year at just 5,058kg, down by 145pc from 12,389kg in the first half of 2024. Belgium was the biggest export market for China's germanium, with 1,950kg exported to the country in the first half of 2025, followed by Russia with 1,015kg, Japan with 1,000kg, and Germany with 990kg.
Exports fell after China became more stringent with the approval process for export licences, causing exporters to wait more than three months for approval. China has likely become stricter with its approval process this year after export-controlled dual-use items were reportedly smuggled to the US in violation of China's export ban, according to market participants.
The fall in gallium and germanium exports has squeezed European supply and buyers are struggling to source material, with germanium supply particularly tight. One trader received a customer request for less than 100kg of germanium but was unable to source enough material from the European market to fulfil the request. Others are offering very small parcels of 2-5kg of metal at a time to preserve stock.
Defence sector particularly vulnerable
Consumers in the defence and aerospace sectors could find it particularly difficult to source material as China's export controls prohibit sales to any military applications and some sellers are cautious about supplying the defence industry in case doing so jeopardises their supply from China.
Defence demand for gallium and germanium is particularly strong due to conflicts across the world upping demand for missile systems and arrays that use the metals.
US arms maker Lockheed Martin increased sales from its missiles and firing control segment by almost 12pc in the first half of the year compared with the same period in 2024 after ramping up production of its Joint Surface-to-Air Standoff Missiles (JASSM) and Long-Range Anti-Ship Missiles (LRASM). The Lockheed Martin-Raytheon joint venture responsible for producing the Javelin weapon system used extensively by Ukrainian forces is also set to ramp up production to a total capacity of 3,960/yr by 2026 from its current 2,400/yr capacity. Javelin and other missile systems rely on germanium lenses for infrared imaging used in their target-seeking systems.
In May, US defence contractor Raytheon delivered its first AN/TPY-2 radar system to use a completely gallium nitride (GaN) populated array. The AN/TPY-2 is used as part of the Terminal High Altitude Area Defense (THAAD) missile defence system to detect and shoot down ballistic missiles, including hypersonic missiles. The GaN semiconductors used throughout the array increase sensitivity and detection range, Raytheon said. The US deployed two THAAD systems to Israel to defend against Iranian missiles during the recent 12-day war.
But companies such as Lockheed Martin and Raytheon may struggle to source the gallium and germanium needed for these technologies. Lockheed Martin, Raytheon and others are subject to a complete dual-use item export ban from Chinese authorities.
Production Potential
Europe is home to two germanium producers — China-owned Vital Materials and Belgian-French Umicore. But there is no significant gallium production in Europe or the US.
Vital produces germanium products from scrap, while Umicore has recently launched a project to produce germanium from copper tailings sourced in the Democratic Republic of Congo.
In May, US-based Indium Corporation produced a small amount of gallium as part of a research and development project with UK-Australian mining giant Rio Tinto, with plans to eventually expand production to 40 t/yr at a plant in Canada. Meanwhile, Greek energy and integrated aluminium conglomerate Metlen plans to produce up to 50 t/yr of gallium from 2028. But these projects will come too late to meet current demand.
