Everyone saw it coming, but hardly anyone took action. The global supply of germanium is facing a crucial test. How did it get this far and what can be done to save it now?
China hardly delivers any more Germanium, In June, exports were almost zero. Alternative sources of supply are extremely rare and are only just being established - if at all - while the industry urgently needs supplies. An interview with TRADIUM expert Dr Christian Hell about strategic failures, economic dilemmas and the long-needed move away from short-term crisis management and a certain naivety. He recommends strategic, stable and forward-looking raw materials procurement.
You are talking about a dramatic shortfall in the supply of germanium. How big is the gap at the moment?
Dr Christian Hell, Senior Manager Germanium and Minor Metals: If we compare the first half of 2024 with the first half of 2025, The result is a drop in exports of almost 60 per cent. As a result, the end customer is missing at least 30 per cent of the ordered quantities - in addition to the short-term and medium-term requirements for current production. If you take into account that strategic stocks should actually also be available, you quickly end up with a gap of around 145 tonnes for Europe. This corresponds to an entire year's global production shortfall. So while there is a shortage of material in this country, China has built up a strategic stockpile of exactly this size in recent months. Demand is huge, but China is controlling exports very closely. This is creating an imbalance of a magnitude and clarity that we have rarely seen before. Under the current circumstances, the deficit will continue to grow month after month. And significantly so.
Wasn't that foreseeable? The export restrictions didn't just come into force yesterday.
That's true. And that is the real problem. The first shock came in the summer of 2023 when Beijing introduced export controls on germanium and the equally critical raw material gallium. In view of the high level of dependency on China, serious efforts should have been made immediately to find alternatives. But not much has happened. Now the decision has finally been made to establish international raw material chains without China. But this should have happened long ago. The backlog is very large and it continues to grow inexorably with each passing month.
What exactly is standing in the way of this structure?
First of all, it costs money and it takes time. Establishing an independent value chain and a closed supply cycle ties up massive amounts of capital, requires expertise and is associated with high labour and energy costs, particularly in Europe. This means that prices for non-Chinese materials will stabilise at a permanently higher level. This is exactly where the dilemma begins.
In what way?
If China lifts the restrictions again in the short term and floods the market with cheap material, large quantities of material will once again be available on the market. The result is likely to be falling prices and a high risk that the alternative structures will collapse economically. Then you are left with an expensive proprietary system that is suddenly no longer viable. Strategically, this would be smart from Beijing's point of view, but it would have fatal consequences for Europe. This Chinese game can be played over and over again.
What would be the right response to this situation?
A clear commitment and swift and decisive action. Both from governments and from the companies that process the raw materials. The current practice of only buying from the cheapest supplier no longer works in the current situation. Sustainability, regionality and strategic planning have long played a role in material purchasing in many places. This should also apply to critical raw materials. If you want security of supply, you have to be prepared to invest in the long term, even if it costs more in the short term.
What does this mean for procurement in the here and now?
The classic just-in-time logic no longer works for critical raw materials. If you want security of supply, you have to rethink: plan for the long term, act with foresight and establish your own reliable structures in Europe. Everything else remains crisis management. The real question has long been: who will finally build something of their own?
The technology metal germanium
Germanium is a technology metal that is primarily a by-product of zinc ore extraction. It plays a central role in various high-tech applications. The most important areas of use include fibre optic cables for fast data connections, semiconductor components such as microchips and memory as well as optical lenses for infrared cameras.
Global production is primarily dominated by China, followed by Russia. Most refineries are currently located in these two countries. Europe and North America currently have hardly any processing and refining capacities of their own to reduce their dependence on individual countries.
Since the summer of 2023, the export of metal from China has been subject to strict regulations. These often lead to delays or prevent deliveries altogether. In December 2024, Beijing even imposed a complete ban on the export of germanium and other dual-use goods to the United States.
