BEIJING/SINGAPORE (Reuters) – Prices of germanium, a strategic metal key for chip production, hit a record high in top producer China on Wednesday, driven by speculation over possible state purchases, industry sources said.
China supplies 60% of the world’s germanium, which is used in applications such as fiber optic cables, solar cells and infrared technology. Last August, the country imposed controls on the export of germanium and gallium products.
Spot prices of germanium bars rose by almost a third last month to a record high of 13,250 yuan ($1,826.48) per kilogram (kg), data from information provider Shanghai Metals Market (SMM) showed.
Prices have risen 38% since export restrictions came into effect, defying expectations that more supply in the domestic market would keep pressure on local prices.
Several industry insiders, who declined to be named because the information was confidential, said the rally was backed by speculation. The National Food and Strategic Reserves Administration, China’s state stockpile agency, bought about 100 tons.
It was unclear how much the state supply manager may have paid, the sources said.
China’s supplies agency did not immediately respond to a request for comment.
“The market chatter increased sentiment and contributed to this price increase, but we prefer to take a more vigilant stance as it is a bit too speculative. Therefore, a downward correction could come even sooner,” said a Chinese germanium trader.
Recent demand from both foreign and domestic users is also supporting prices, according to a Chinese germanium exporter.
“We have recently received many inquiries from Japan and South Korea about germanium oxide,” said the person, who declined to be named.
China’s exports of germanium, including processed and unprocessed products, fell 55% in the first five months of this year from the same period last year to 11.08 tonnes, while the value of shipments rose by almost 300%, it said. showed from customs data.
($1 = 7.2544 )
