The price of gallium, a key metal used in semiconductors, solar panels and other advanced technologies, has climbed to $595 per kilogram, the highest price since 2011. BloombergChina is a major global supplier, accounting for 94% of gallium production. This sharp increase is as follows China’s latest export ban Supplies critical minerals to the United States, including gallium, germanium and antimony.
The controls are said to be part of China’s strategy to maintain its influence in critical supply chains amid increasing competition and trade barriers imposed by the United States and other Western countries. Officially, these measures are intended to ensure the legal and appropriate use of gallium, but they are also seen as a warning to limit China’s technological progress.
While the restrictions do not amount to a blanket ban, they create uncertainty, prompting buyers to lock in shipments and causing prices to rise. Gallium prices rose 17% in a week in December 2024 and are expected to rise further as the global industry scrambles to find alternative sources.
The sudden rise in gallium prices reflects the metal’s integral role in modern technology. Gallium arsenide is a compound derived from metals that is widely used in advanced semiconductors and high-performance electronic components. Without readily available alternatives, industries that rely on gallium, including consumer electronics, aerospace and green energy, are under pressure to absorb rising costs.
China’s moves are also affecting the broader critical minerals market. Export controls have raised concerns about further restrictions on other strategic resources, leading the United States, Europe and other regions to step up efforts to reduce their reliance on Chinese supplies. However, establishing alternative production is challenging due to the high cost of gallium extraction and processing. Analysts note that ramping up production in regions such as Canada or Europe could take years, leading to higher prices in the short term.
The current situation highlights the fragility of global supply chains that rely on critical minerals. Currently, industries are grappling with the immediate impact of soaring prices and uncertain supply. In the longer term, the crisis is likely to accelerate investment in alternative sources and recycling technologies, with the potential to reshape the global landscape for critical materials such as gallium.