Print the page
Increase font size

Posted August 02, 2023

Ray Blanco

By Ray Blanco

China Look To Corner Another Metal Market

Our trade war with China added another chapter this week.

Unlike with our ongoing Chip War with the People’s Republic, this time they’re looking to press the advantage in an area they’ve already built a big lead…

Rare metals.

The U.S. is desperately trying to play catchup in that area, with China controlling a majority of the market for many of the metals needed for clean energy solutions, like EV batteries and solar panels.

We’ve covered many of these metals at length, such as nickel and lithium, but today we’re turning it over to my colleague Sean Ring of The Rude Awakening to do a deep-dive on two metals we haven’t discussed: gallium and germanium.

China Curbs Metal Exports to U.S.

By Sean Ring

The Chinese government said it will impose export restrictions from August 1, 2023, on some gallium and germanium products to protect its national security.

What are those and why are they so important?

What’s gallium?

Gallium is a soft, silvery metal at standard temperature and pressure, but melts at slightly above room temperature.

That makes it one of the few metals that can be liquefied by heat from the human body. No wonder it’s not used to make chastity belts!

Gallium is used in electronics because it can easily produce a high electron mobility at room temperature.

What’s high electron mobility, you ask?

The higher the electron mobility, the faster the electrons can move, and therefore, the faster the current can change. This means that devices can switch on and off more quickly, which is crucial for high-speed electronics such as microprocessors and for not annoying consumers.

Additionally, higher electron mobility leads to lower power consumption. When electrons move easily, less energy is required to maintain a given current, leading to more energy-efficient devices. This is paramount in battery-powered devices where energy use needs to be minimized to prolong battery life.

Materials with high electron mobility often operate at higher frequencies, enabling advanced technologies such as high-frequency radar and satellite communication systems.

What are gallium’s top five uses?

Pretty much everything The Left want to run the world with. Here are a few examples:

  1. Semiconductors: Gallium Arsenide (GaAs) and Gallium Nitride (GaN) are widely used in electronic devices including mobile phones, satellite communication systems, and high-speed microelectronics.
  1. Light-emitting diodes (LEDs): Gallium is an essential ingredient in the manufacture of light-emitting diodes and diode lasers.
  1. Solar panels: Gallium Arsenide is used in high-efficiency solar panels. Its properties make it excellent for concentrated photovoltaics and space-based solar arrays.
  1. Medical Applications: Gallium's low melting point allows it to be used in some medical thermometers as a non-toxic replacement for mercury.
  1. Alloys: Gallium is also used in some alloys to lower their melting points. It's often used in research and development settings for this purpose.

The Critical Raw Metals Alliance says only a few companies - one in Europe and the rest in Japan and China - can make gallium at the required purity.

Which countries are the top five gallium producers?

From Reuters:

China exported 94 metric tons of gallium in 2022, up 25% on the prior year, according to Chinese customs.

Small amounts of gallium - around 10 metric tons in 2021 - are produced by Japan, Russia and South Korea, according to USGS.

Germany and Kazakhstan also produced it in the past.

What’s germanium?

Germanium is a hard, lustrous, grayish-white metalloid in the carbon group, chemically similar to its group neighbors silicon and tin. 

Germanium is not found as a free element in nature; it's often found in minerals combined with other elements, and is extracted as a byproduct of zinc ore processing as well as from the fly ash of certain types of coal.

What’s fly ash, you ask?

Fly ash is a byproduct of coal combustion, primarily in electric power plants. It's composed of tiny, spherical particles rich in silica, alumina, and calcium. These particles are carried up with flue gasses during combustion, hence the name "fly ash."

What are germanium’s top five uses?

Again, these uses are important for old tech and new:

Fiber-Optic Systems: Germanium is used in fiber-optic cables as an optical amplifier. It helps transmit light over long distances without signal degradation.

Infrared Optics: Germanium is transparent to infrared light and is often used in infrared cameras, sensors, and other infrared optical equipment.

Semiconductors: Germanium was one of the first materials used to develop transistors for electronics because it is a good semiconductor. It is still used in some electronic devices.

Solar Cells: Some high-efficiency solar cells use germanium as the substrate onto which the solar layers are deposited.

Catalysts: Germanium is used in certain types of catalysts in the chemical industry.

Which countries are the top five germanium producers?

According to the CRMA:

  1. China (produces around 60% of the world's germanium)
  2. Canada
  3. Finland
  4. Russia
  5. United States

Does the US really want to remove the most important seller from these two incredibly important markets? Or be removed from them?

Wrap Up

This tit-for-tat trade sanctioning is starting to look like a full-on divorce.

The West and the BRICS are heading for an expensive showdown… and we all know who’s footing the bill.

We are!

I don’t know what the answer is, or if there is an answer anymore.

But what’s clear is the BRICS and the Global South will not stand by idly in a trade war.

They’ll fire shots. And some will hit.

AI Gets Political

AI Gets Political

Posted January 17, 2024

By Ray Blanco

AI takes center stage in Davos. How this week will shape what AI looks like for decades to come.

Consumer Electronics Show Debrief!

Posted January 16, 2024

By Ray Blanco

A run down of what the Paradigm crew learned from CES in Vegas - plus the week’s top tech stories.

Filtering Out Fake News

Posted January 12, 2024

By Ray Blanco

AI offers a unique solution to the Fake News epidemic.

Should I Buy Bitcoin?

Posted January 11, 2024

By Ray Blanco

It’s official, the Bitcoin ETF has been approved. Its price keeps going up, but should you buy-in now?

Live From CES in Vegas!

Posted January 10, 2024

By Ray Blanco

Zach, Matt, Ari, and Bob are providing live updates from the Consumer Electronics Show in Las Vegas.

Bigger Than Bitcoin

Posted January 09, 2024

By James Altucher

James Altucher tells us why he’s not bothering with the next Bitcoin bull run, even though he thinks it’s legit.