Gallium price jumps 17% in a week after China responds to US sanctions

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China is the world’s main supplier of gallium, accounting for 94% of the mineral’s production. The compound gallium arsenide is widely used in the production of semiconductors and other electronic components. Without readily available substitutes for gallium, industries dependent on its supply, including the consumer electronics, aerospace and green energy sectors, are faced with the need to cover rising costs as its price increases.

The sharp rise in prices followed China’s restrictions on exports of critical minerals to the United States, including gallium, germanium and antimony. While this is not a complete ban, it has created uncertainty, prompting producers to stockpile supplies and setting the stage for further price increases.

In particular, this is due to the high cost of gallium mining and processing. And it could take years to ramp up gallium production in Canada or Europe. In the short term, China’s export restrictions will lead to higher prices, but in the long term they could accelerate investment in alternative sources and processing technologies.