Gallium Supply Shock and Market Heat

Summary
Gallium prices continue climbing as China's export restrictions take hold. Spot pricing now exceeds $1,000/kg, and major buyers are scrambling to diversify supply sources.

Key Points
• China resumed some gallium exports in June (~4.26 metric tons), while germanium shipments remained at critically low levels. SMM data summary
• The gallium price has more than doubled—from ~$350/kg in mid‑2023 to over $725/kg, and currently near $1,058/kg in early 2025. StrategicMetalsInvest

Why It Matters
• Surging prices signal intensifying strategic risk across defense and telecom sectors.
• China’s dominance (98% production share) places global buyers in supply shock territory.
• Diversifying domestic recycling and byproduct recovery becomes increasingly urgent.

Watchlist Companies
• Neo Performance Materials
Source: https://www.reuters.com/world/china/neo-performance-materials-exits-separation-facilities-in-china-2025-05-22/
Reason: Key non‑Chinese gallium recycler, boosting North American output and reducing reliance on Chinese capacity.

• Ucore Rare Metals
Source: https://www.reuters.com/markets/commodities/gallium-lens-chinas-minerals-dominance-how-break-it-andy-home-2025-05-09/
Reason: Developing U.S.-backed separation technologies for rare earths and gallium to offset China’s supply control.

Critical Mineral Spotlight: Gallium
Gallium (atomic number 31) is a silvery metal notable for its unusual melting point—just 29.76 °C, allowing it to liquefy in your hand.² Though never mined directly, it’s extracted as a byproduct of aluminum and zinc refining, with global consumption dominated by electronics.³ Used in LEDs, GaAs/GaN semiconductors, radar systems, and high-efficiency solar panels, gallium’s strategic relevance has exploded amid China's near-monopoly over production and export control policies.¹

Action Points
• Track gallium spot and futures pricing around the $1,000/kg threshold.
• Monitor Neo’s capacity growth and production diversification plans.
• Watch for new domestic processing or recycling announcements from Ucore and affiliated startups.

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