The licensing requirement affected international raw materials trade within weeks. To this day, Chinese authorities decide who receives which materials, for what end use, and in what quantities.
China has controlled exports of selected gallium and germanium products since August 2023. As a result, germanium export volumes remain well below the levels seen before the restrictions were introduced. Gallium shipments fluctuate sharply and remain concentrated among a small number of destination countries. For industrial buyers, supply uncertainty has long been part of day-to-day procurement.
China Hits a Sensitive Nerve
Beijing’s export controls on gallium and germanium came into force on 1 August 2023. From then on, exporters were required to apply for licences and provide additional information on recipients and intended uses. At times, shipments came to a near standstill. „With its export restrictions, China has hit a very sensitive nerve,” says Dr. Christian Hell, Senior Manager Germanium and Minor Metals at TRADIUM.
It has now become abundantly clear just how vulnerable international supply chains are. This is particularly evident in the case of germanium, which has long been shaped by two major producer countries: China and Russia. While the EU and the United States have severely curtailed economic relations with Russia, Beijing can selectively control access to the technology metal through its export approval process. Jan Giese, Head of Sales & Trading at TRADIUM, points to the indirect effects: “The controls are felt not only through a complete blockade, but also through longer approval times, additional documentation requirements, and reduced predictability. Even when material continues to flow, deliveries can take longer and supply becomes less reliable.” At the same time, China gains detailed insight into supply chains, customer networks, and the ultimate end users of the raw materials exported.
Germanium is used in infrared optics, fiber-optic cables, and semiconductors, among other applications. The metal also plays an important role in security-related technologies. The restrictions therefore affect not only individual industries, but key areas of modern industrial production.
Sharp Fluctuations Instead of Reliable Shipments
Chinese export data have shown a recurring pattern since 2023: months with higher shipment volumes are repeatedly followed by sharp declines. Destination countries also shift. In addition, Beijing has placed a growing number of companies in the United States, Japan, and the EU which Beijing has placed on specific export control lists. For Giese, this reinforces the impression that access to critical raw materials is now being used quite openly as a geopolitical tool.
Against this backdrop, TRADIUM’s experts have observed a clear shift in the procurement behavior of industrial buyers. Requested volumes in some cases far exceed previous purchasing levels, reflecting efforts to guard against further restrictions.
“Companies have recognized the warning signs and now want to build inventories. However, that has become difficult—if not already too late,” Hell explains. Giese adds: “For raw materials such as gallium and germanium, it may now be nearly impossible to build substantial strategic stockpiles in the near term. Availability is already so limited that taking material off the market could make the situation even worse.”
China’s Next Move Remains Uncertain
Alongside volatile shipment volumes, another key question remains unanswered: How long will China maintain its export controls, and what might any easing look like? A rapid reopening could initially create an oversupply and drive prices lower before the market absorbs the available volumes. Under a gradual easing, supply would likely improve only slowly, while prices remained comparatively high. Hell identifies these as two possible scenarios.
For Giese, this uncertainty makes any long-term planning especially difficult: “Companies do not know whether material will be available, when it will arrive, or in what quantities. Nor do they know the conditions under which they will be able to procure it tomorrow. China can maintain or tighten the controls—or ease them with little notice. Each scenario would have different, far-reaching implications for availability and prices. No scenario offers planning certainty.”
