Ge buyers seek new supply, alternatives as demand rises

Spanish Market: Metals
30/09/24

Germanium consumers around the world are looking for alternatives while producers aim to lift output, as demand increases while restrictions on exports from China reduce availability.

Prices for 99.999pc germanium metal exported from China have soared to $2,580-2,680/kg fob from $1,450-1,550/kg at the start of June and $1,110-1,210/kg at the start of 2023, according to Argus assessments. The upper end of the range in Europe tipped past $3,000/kg cif at the start of September and remains there. Germanium dioxide prices have similarly climbed.

Demand for germanium for defence and advanced computing applications is growing. The adoption of artificial intelligence (AI) in a range of industries is driving strong demand for silicon-germanium owing to the compound's ability to operate at higher frequencies and lower power. That makes it well suited to the higher performance and efficiency that AI requires, according to Israeli firm Tower Semiconductor.

Tower expects the utilisation rate of its Fab 3 facility to hit full capacity in the third quarter, up from 55pc in the second quarter in response. Beyond AI and data communications, automotive manufacturers are exploring the use of silicon photonics in light detection and ranging (LiDAR), the company said. As advanced driver-assistance systems (ADAS) become standard and autonomous vehicles are rolled out, consumption of germanium in infrared optics for thermal imaging cameras and night vision devices is increasing.

But consumers are concerned about security of supply. The US increased its imports of germanium metal and dioxide in 2023 by around 20pc year on year to 38t, according to the US Geological Survey. Exports from China, the world's largest germanium producer and exporter, dropped sharply after the government introduced export controls in August 2023.

Given the use of germanium in optical components, power devices and sensors, the US Department of Defense (DoD) is working with suppliers to ensure it has sustainable access.

The Defense Logistics Agency has a partnership with LightPath Technologies to replace germanium in certain DoD applications. LightPath is working to reduce the amount of optics it produces from germanium, to reduce the risk of supply chain disruption and help customers convert their systems to use optics made from its Black Diamond chalcogenide materials, the company's president and chief executive, Sam Rubin, said in its second-quarter earnings call.

LightPath's infrared component sales fell by $1.7mn, or 36pc, primarily after its largest customer did not renew a large annual contract for germanium-based products. The company last week announced a $500,000 initial production order for thermal imaging assemblies using Black Diamond from a new tier-1 defence customer.

But for other products, the DoD is working to support an increase in its germanium consumption. It is investing in Canadian semiconductor materials firm 5N Plus to expand its capacity to produce space-qualified germanium wafers used in solar cells for defence and commercial satellites. It has awarded the company $14.4mn via the Defense Production Act Investment programme to upgrade and expand the production facilities and tools at 5N's facility in St George, Utah.

The four-year project will work to improve germanium sourcing, recovery and refining, the DoD said, and supports product diversification to ensure the long-term viability of the business. It also aims to address process integration to meet solar cell producers' changing germanium substrate requirements.

Germanium producers are looking to capitalise on the rise in demand by increasing output, as the higher prices make refining the metal more profitable. Mining exploration companies such as Anson Resources and EV Resources in Australia and Cantex Mine Development in Canada are pursuing projects with germanium content for potential production. But the fastest way to do so is by processing tailings to extract germanium.

For instance, Hong Kong Sinomine Rare Metals, which has acquired the Tsumeb copper smelter and polymetallic tailings pile in Namibia, recently estimated that the tailings contain 746.21t of germanium metal. The company plans to add a germanium-zinc smelting production line to the copper smelting line, to commercialise output "as soon as possible".

Earlier this year, Belgium's Umicore signed a long-term agreement with STL1, subsidiary of Democratic Republic of Congo state-owned mining firm Gecamines, to optimise germanium production at STL's processing facility commissioned in 2023 at the Big Hill tailings site in Lubumbashi.

STL's germanium previously entered the market through third-party refiners outside the country. The company is looking to increase the value it generates from the metal by refining it domestically, while Umicore will diversify its sources of germanium supply with an offtake of "substantial volumes" for its downstream optical and electronic products. Umicore expects to refine the first test volumes of concentrates in the fourth quarter, and help analyse the germanium content in the tailings to further develop downstream products.

A continued rise in prices could see further refining and recycling capacity come on line, unless substitution in germanium's various growing applications becomes more widespread.

By Nicole Willing

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20/12/24

Viewpoint: Copper volatility, uncertainty ahead in 2025

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Viewpoint: PGM demand from hydrogen sector to rise

20/12/24

Viewpoint: PGM demand from hydrogen sector to rise

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US Congress passes waterways bill

19/12/24

US Congress passes waterways bill

Houston, 19 December (Argus) — The US Senate has passed a bipartisan waterways infrastructure bill, providing a framework for further investment in the country's waterways system. The waterways bill, also known as the Water Resources and Development Act (WRDA), was approved by the Senate in a 97-1 vote on 18 December after clearing the US House of Representatives on 10 December. The WRDA's next stop is the desk of President Joe Biden, who is expected to sign the bill. The WRDA has been passed every two years, authorizing the US Army Corps of Engineers (Corps) to undertake waterways infrastructure and navigation projects. Funding for individual projects must still be approved by Congress. Several agriculture-based groups voiced their support for the bill, saying it will improve transit for agricultural products on US waterways. The bill also shifts the funding of waterways projects to 75pc from the federal government and 25pc from the Inland Waterways Trust Fund instead of the previous 65-35pc split. "Increasing the general fund portion of the cost-share structure will promote much needed investment for inland navigation projects, as well as provide confidence to the industry that much needed maintenance and modernization of our inland waterway system will happen," Fertilizer Institute president Corey Rosenbusch said. The bill includes a provision to assist with the damaged Wilson Lock along the Tennessee River in Alabama. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Xcelsior aims to derisk minor metals investment

19/12/24

Q&A: Xcelsior aims to derisk minor metals investment

London, 19 December (Argus) — When UK-based Xcelsior Capital started exploring the investment landscape in the mining industry it noticed a significant interest in base metals but a lack of attention toward the lesser-known minor metals. These critical materials are often opaque and complex, leaving investors uncertain about where to start. Argus spoke with chief executive Liam Farley about Xcelsior's partnership with trading firm Wogen, the opportunities and risks associated with its investments, the influence of geopolitics, and Xcelsior's recent involvement in the Hillgrove antimony mine in Australia. What is Xcelsior Capital, and what is its investment model? Xcelsior is primarily a private credit investor that focuses on providing senior secured loans and working capital facilities and prepayments. As a financing partner of a physical commodity trader, Wogen Resources, we aim to establish a long-term sales and distribution agreement or offtake as part of our transactions. 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Minor metals have multiple end-uses, each with its different market dynamics. You must have a very deep understanding of the commodities themselves, the pricing mechanism, and the material specifications… these supply chains can be opaque. They can be very complex and fast-changing. Being able to navigate them is quite challenging for a lot of more generalist investors. It fundamentally creates a market risk component for critical metals, which can be a barrier. Additionally, many larger mining companies have traditionally avoid these markets because the assets are smaller and may not yield the expected revenue and profits compared with larger copper or iron ore mines. Which metals are on your radar? We are looking very closely at all the major commodities where Wogen has a prominent trading platform, including antimony, tungsten, vanadium, mineral sands, chrome and magnesium. We also are very interested in cobalt, but more on the recycling and processing side. In base metals, we are looking at tin. We focus on those commodities with energy transition links to new demand centres. New demand from sources like solar in small markets can significantly impact overall percentages and returns. For instance, electrification drives substantial demand growth for larger markets like copper, but its impact is smaller than that of markets like antimony. You recently signed an antimony deal with Larvotto Resources in Australia. Could you tell us more about it? We have signed a binding agreement with Larvotto Resources, whose subsidiary owns the brownfield antimony/gold Hillgrove project in New South Wales, Australia. We provided a $4mn loan in return for a seven-year production offtake agreement with Wogen, which will obtain the antimony concentrate from the mine and sell it globally through its customer base. Antimony prices have soared this year in part because of China's export restrictions. Do geopolitics play a significant role in investment decisions? There are large opportunities arising from the dislocation of value chains caused by geopolitics. We're now seeing this almost bifurcation in any material classified as dual-use in China like gallium, germanium and now antimony. This will result in increased volatility. The challenge is that you always want to underwrite projects based on long-term fundamentals, and we still do that. But we see the geopolitical shifts as an upside where we can capture that volatility in our investment strategy rather than rely on it as the sole basis for success. As global trade become more complex, do you see a need for more collaboration across different actors in the value chain? Private-public partnerships in critical metals are an absolute must for the success of western supply chains. One of our big focuses is to work with western groups, including government agencies, to facilitate the reshoring of critical metals and to figure out ways to incentivise new processing downstream. As a standalone investment, they can be challenging. They require very niche capital with great understanding. We are also looking for long-term partnerships with end-users and OEMs to form alliances and secure the supply of materials. There is a big opportunity in this area, but it takes a partnership approach, and that's something that everyone in our industry should prioritise in the next five to 10 years. By Cristina Belda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

EU HRC imports drop a quarter on safeguards, AD probe

19/12/24

EU HRC imports drop a quarter on safeguards, AD probe

London, 19 December (Argus) — EU hot-rolled coil (HRC) imports have dropped by 24pc year on year in October, as a result of the safeguards changes introduced earlier in the year and the anti-dumping (AD) probe on key suppliers launched in August. Volumes amounted to 1.16mn t. The drop was underpinned by sharp declines from Japan, Egypt, Vietnam, Taiwan and South Korea. Meanwhile, other countries stepped in to fill the supply gap, such as Turkey, Ukraine and Serbia — deemed less risky for buyers, with all ramping up their volumes year on year by 292pc, 69.5pc and 172.8pc, respectively. Turkey was the top supplier with 222,760t in October. Imports from Indonesia also notably increased, by 41.5pc on the year to 29,140t. This volume will be likely to grow over November-March, but the country is expected to no longer be exempt from the safeguard measures from April onwards, market participants said. The European Commission this week launched an early review of the tariff-rate quotas, with changes, including on the developing countries list, to be introduced from April. Import supply is likely to drop further over the rest of the year, and into the first quarter, with January the last month in which residual larger volumes from countries under investigation can be custom cleared. Sales from Japan, Egypt, Vietnam and India, all under the scope of the AD probe , have mostly stopped over the current quarter. Cold-rolled coil (CRC) imports are meanwhile on the rise, with 281,336t clearing in October, up by 33.4pc on the year and 53.5pc on the month. Taiwan was the top supplier with 64,208t, followed by Turkey and India with just over 40,000t each. The increase in Taiwanese imports, which are expected to rise further, have fuelled talks in the market of a potential AD investigation. Similarly, hot-dipped galvanised (HDG) imports rose by 60.1pc on the year to 802,688t, of which 270,226t was from Vietnam, representing a 279.1pc increase year on year. Market participants have expected a probe on Vietnamese HDG for a while, but following the safeguards review launch said that a reduction in quota volumes might hit downstream products such as HDG and CRC in particular. Plate imports have also nudged up, but more modestly, by 6.9pc on the year in October to 222,133t. Rebar and wire rod arrivals were up by 170.6pc and 46.5pc on the year, respectively. By Lora Stoyanova EU HRC imports t Oct-24 ±% Oct-23 Total 1,164,750 -24 Turkey 222,760 292 Japan 164,691 -38.2 Egypt 148,979 -19.7 Vietnam 144,512 -54.7 Taiwan 127,350 -54.5 Ukraine 103,003 69.5 South Korea 90,674 -45.9 Serbia 55,372 172.8 Australia 30,690 -62.4 Indonesia 29,140 41.5 — GTT Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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