China puts export controls on gallium, germanium products
Move seen as retaliatory measure in US-China chip spat-analysts
Firms rush to apply for permits, stockpile
Concerns rise that curbs on rare earth exports could benext
Measure announced just before Yellen visit to Beijing
(Adds details on worries over rare earths, quotes, share price of Australia rare earth producers)
China's restriction of exports of some metals widely used in semiconductors, electric vehicles and high-tech industries has ramped up a trade war with the United States and could potentially cause more disruption to global supply chains.
China's commerce ministry said on Monday it would control exports of eight gallium products and six germanium products from Aug. 1 to protect national security, a move analysts saw as a response to escalating efforts by Washington to curb China's technological advances.
Companies caught out by the abrupt news acted to secure supplies, with one U.S. semiconductor wafer manufacturer saying it was applying for export permits to assure investors, and a China-based germanium producer saying enquiries from buyers came in overnight as prices surged.
"China has hit the American trade restrictions where it hurts," said Peter Arkell, chairman of the Global Mining Association of China.
Jeffries analysts said timing of the measure raised questions about it being possibly directed at this week's visit to Beijing by U.S. Secretary of Treasury Janet Yellen and whether Washington would cancel the trip.
Some in the industry said they feared China could follow this with new restrictions on rare earth exports, after curbing shipments 12 years ago in a dispute with Japan. Rare earths are a group of metals used in EVs and military equipment and China is by far the world's biggest producer.
"Gallium and germanium are just a couple of the minor metals that are so important for the range of tech products and China is the dominant producer of most of these metals. It is a fantasy to suggest that another country can replace China in the short or even medium term," Arkell said.
China produces most of the world's gallium and germanium. In 2022, top importers of China's gallium products were Japan, Germany and the Netherlands, news website Caixin said, citing customs data. Top importers of germanium products were Japan, France, Germany and the United States, it said.
EXPORT PERMITS, DISRUPTION WORRIES U.S. semiconductor wafer maker AXT Inc AXTI.O , which has manufacturing facilities in China, said on Monday its Chinese subsidiary Tongmei would apply for permits to keep exporting gallium and germanium substrate products from China.
"We are actively pursuing the necessary permits and are working to minimize any potential disruption to our customers," said AXT Chief Executive Officer Morris Young.
A manager at a China-based germanium producer said his company had received several queries from buyers in Europe, Japan and the United States hoping to stockpile product before the export controls take effect. The buyers were anticipating it could take as long as two months to obtain export permits.
"Offer prices in the domestic market and the export market have increased to 10,000 yuan ($1,380) per kg and over $1,500 per kg, respectively," he said.
While the industry had expected to see some export controls for these metals, the timing had caught it by surprise, he said.
Some downstream users with long-term sales contracts "are vexed about a possible jump in raw material prices, as it raises their production costs and may cause them losses," he said, declining to be named citing the sensitivity of the matter.
Government officials in Taiwan and South Korea, however, downplayed any disruption from the curbs. Taiwan Deputy Foreign Minister Roy Lee said he only expects a short-term impact.
South Korea's industry ministry said in a statement the country had sufficient stockpiles of gallium while there were other sources of germanium.
Shares in some metal producers rose on Tuesday, with Yunnan Lincang Xinyuan Germanium Industry Co 002428.SZ jumping 10% by the daily upper limit, and Yunnan Chihong Zinc & Germanium Co 600497.SS climbing 7%.
Shares of Australian rare earths producers also rallied as investors placed bets that more curbs could be imposed. Shares in Lynas Rare Earths (LYC) , the world's largest producer of rare earths outside of China, rose 4%.
ESCALATION RISK China's controls come as Washington mulls new restrictions on the shipment of high-tech microchips to China, following a series of curbs in recent years.
The United States and the Netherlands are also expected to further restrict sales of chipmaking equipment to China's chipmakers this summer, part of efforts to prevent their technology from being used by China's military.
Beijing last made a retaliatory move against U.S. pressure on chips in May, when it banned some domestic sectors from purchasing products from U.S. memory chipmaker Micron MU.O .
Jefferies analysts said they saw the export controls as China's second and bigger countermeasure after the Micron ban.
"The risk of a rapid escalation of U.S.-China tension is not small," they said.
"If this action doesn't change the U.S.-China dynamics, more rare earth export controls should be expected."
($1 = 7.2326 yuan)
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ BREAKINGVIEWS-China’s rare earths swipe has more bark than biteFACTBOX-Where are strategic materials germanium and gallium produced? QUOTES-What people are saying about China's chipmaking export controls
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
- Forums
- ASX - By Stock
- News: LYC UPDATE 2-Beijing jabs in US-China tech fight with chip material export curbs
China puts export controls on gallium, germanium products Move...
-
- There are more pages in this discussion • 40 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add LYC (ASX) to my watchlist
|
|||||
Last
$6.98 |
Change
-0.040(0.57%) |
Mkt cap ! $6.552B |
Open | High | Low | Value | Volume |
$6.92 | $7.02 | $6.86 | $6.466M | 930.4K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
24 | 5035 | $6.97 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$6.98 | 5902 | 26 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
24 | 7065 | 6.970 |
21 | 17505 | 6.960 |
14 | 34075 | 6.950 |
8 | 13376 | 6.940 |
6 | 70919 | 6.930 |
Price($) | Vol. | No. |
---|---|---|
6.980 | 3533 | 17 |
6.990 | 16281 | 26 |
7.000 | 27662 | 19 |
7.010 | 27108 | 9 |
7.020 | 41613 | 18 |
Last trade - 11.31am 29/08/2024 (20 minute delay) ? |
Featured News
LYC (ASX) Chart |
The Watchlist
UNT
UNITH LTD
Idan Schmorak, CEO
Idan Schmorak
CEO
Previous Video
Next Video
SPONSORED BY The Market Online