The People's Republic is tightening export regulations for a number of critical resources, thereby setting a further geopolitical accent.
Beijing has expanded the list of raw materials that require an export licence. According to a Communication from the Ministry of Trade of 4 February, these regulations apply with immediate effect to certain compounds and products made from indium, molybdenum, bismuth, tungsten and tellurium. Among other things, the regulation affects cadmium telluride wafers, which are used in special solar cells, as well as indium phosphide, an important material for the semiconductor industry.
The raw materials power underlines its market position - once again
Similar to Gallium and germaniumfor which comparable regulations have been in place since summer 2023, China justifies the measures with national security. The raw materials and alloys in question are classified as dual-use goods and can be used for both civilian and military purposes. The People's Republic has a dominant market position in the production of the aforementioned raw materials and downstream stages of the value chain. The country has repeatedly emphasised this influence in recent times. About a year after introducing export restrictions on gallium and germanium, China enacted similar measures for antimony last August.
"It's no surprise that commodities are increasingly being used as a means of exerting pressure. We have been observing this trend for a long time and it is likely to continue," says Matthias Rüth, Managing Director of TRADIUM. Already last year he had pointed outthat export controls are an instrument for exercising economic power. "Companies that process raw materials must be prepared for ongoing uncertainties. They should therefore actively address the security of their supply chains and develop strategies to minimise default risks."
Commodity markets under geopolitical pressure
A few months after the restrictions on antimony, which is used as a flame retardant among other things, the People's Republic targeted its trade restrictions at the USA - a reaction to the latter's efforts to block China's access to state-of-the-art computer chips. Under the new US President Donald Trump, bilateral relations have deteriorated further and new import tariffs on Chinese goods were recently announced. Given the proximity in time, the latest commodity restrictions could be interpreted as a direct response to this.
