Hafnium exported to the US from China now faces a duty of nearly 80pc under US president Donald Trump's new tariff regime, raising market participants' concerns about a potential shortage later this year.
The new 34pc reciprocal tariff on Chinese imports to the US applies to hafnium, which has not been exempted, unlike most non-ferrous metals. Hafnium now faces a 79pc tariff, up from 25pc, after multiple increases since Trump took office in January.
The US produces hafnium but is not self-sufficient. It still relies on imports to meet demand.
"The US needs some hafnium from third countries — there's no way around it," a European trading firm told Argus.
Global supply of pure hafnium metal totals only 70-75 t/yr, according to industry estimates, and is concentrated in just four producing countries — France, the US, China and Russia.
China exported 1,499kg to the US in January this year, according to Chinese customs data.
North American hafnium producers do not always have excess production available for competing sectors such as aerospace, semiconductors, space and nuclear, while western consumers have largely moved away from importing hafnium from Russia since the start of the Ukraine conflict.
France has placed a 20pc tariff on hafnium exports to the US and recently has exported less material, sources said.
Global competition for hafnium is strong, with Japan and South Korea recently having increased their purchases to feed higher nuclear power generation, for which hafnium is used in nuclear rods.
When hafnium tariffs rose to 35pc in February from 25pc, US and Chinese trade partners discussed sharing the costs, but some Chinese sellers rejected the idea, citing limited profit margins for exports.
The US imported no material from China in February because of uncertainty surrounding tariffs.
Licenses difficult to obtain
Since China issued an export control list for dual-use items in September 2024, there have been extensive delays to the export license approvals process for hafnium. A license was already required to export the metal, but over the past few months, these have taken longer to process and some have been revoked.
Exporters must notify authorities of the final end-user and application of the material traded. Additionally, authorities are asking sellers to travel overseas and visit the plants at which they sell the metal to verify the end-user. "This has put traders out of the game," a source said.
The tariffs and delays could push international prices up again. At present, there is a disconnect between long-term contracts and spot prices.
Rotterdam prices have been mostly flat this year given the dearth of spot demand as consumers replenished stocks in advance.
Argus assessed European hafnium prices unchanged today at $3,700-3,900/kg duty unpaid Rotterdam on thin spot liquidity.
Long-term contracts are still high because when the supply crunch started, some trading firms signed multi-year contracts that remain valid but are set to end soon. Some buyers are paying close to $6,000/kg and higher on these terms.
In China, the market weakened on 3 April as some suppliers accepted lower bid prices to cope with sufficient spot stocks and an expected decline in purchases from US consumers. Prices of 99.95pc-grade hafnium crystal bar with 0.2pc zirconium fell to Yn16,300-16,500/kg ex-works from Yn16,500-17,000/kg ex-works on 27 March.
