China has banned the export to the United States of items related to the minerals gallium, germanium, and antimony, which can be used for military purposes.
The mentioned statement was made by the authorities of the specified Asian country on Tuesday, December 3, the day after the US imposed further restrictions on shipments to China of advanced chips and equipment for the production of microcircuits of the corresponding category.
The Chinese Commerce Ministry’s directive on dual-use items, both military and civilian, mentions national security considerations. It is worth noting that the United States imposes restrictive measures against an Asian country under the same pretext.
The mentioned directive takes effect immediately. It is worth noting that in this case, a stricter review of the end use of graphite items supplied to the United States is provided.
In a statement from the Chinese Commerce Ministry, it was noted that, in principle, the export of gallium, germanium, antimony, and superhard materials to the US shall not be permitted.
It is also worth noting that the new restrictive measures strengthen the requirements for compliance with existing control standards for external shipments of critical minerals, which Beijing began to impose last year. The relevant decisions apply only to the export of items to the United States market amid escalating trade tensions between the US and China. It is expected that after the return of Donald Trump, who won the United States presidential election last month, to the White House, most of Washington’s restrictions on Beijing will remain. Moreover, Mr. Trump has repeatedly declared his intentions to tighten the US tariff policy.
Chinese customs data indicate that there were no shipments of wrought and unwrought germanium or gallium from an Asian country to the United States in October. At the same time, last year the US was the fourth and fifth-largest market for germanium and gallium, respectively. The mentioned minerals are used in semiconductors. Germanium is also applied in infrared technologies, fiber optic cables, and solar cells.
The overall volume of shipments of antimony products from China in October showed a decrease of 97% compared to the figure recorded in September. The actual cancellation of activity in the relevant area of export activity occurred after Beijing made an appropriate decision.
Last year, China’s share in the structure of global antimony mining was fixed at 48%. Antimony is used in ammunition, infrared missiles, nuclear weapons, night vision goggles, photovoltaic equipment, and batteries.
Data from the consulting company Project Blue shows that China accounted for 59.2% of refined germanium output and 98.8% of refined gallium production this year. The mentioned firm co-founder Jack Bedder said Beijing’s decision to restrict mineral exports would provoke a significant escalation of supply chains tensions, noting that access to raw material units is already tight in the West.
As of November 28, prices for antimony trioxide in Rotterdam were fixed at $39,000 per metric ton. This is evidenced by the data of the Argus information provider. It is worth noting that the mentioned indicator has grown by 228% since the beginning of the current year.
Minor metals EU trader, who used the right of anonymity, said during a conversation with media representatives that against the background of export restrictions from China, many countries will try to find antimony deposits. This is a logical assumption to a certain extent, but the presence of minerals is not what can emerge depending on desire or effort, no matter how intense the corresponding actions and aspirations may be.
This week, the United States imposed the third package of restrictive measures against China’s semiconductor industry in the last three years. As part of the next stage of the relevant Washington policy, it was decided to curb exports to 140 companies, including the manufacturer of equipment for making chips, Naura Technology Group.
It is worth noting that during the first presidential term of Donald Trump, an escalation of trade tensions between the United States and China was recorded. Mr. Trump has already announced his intention to impose 10% tariffs on goods imported from an Asian country. It is worth noting that during the election campaign, he threatened that the mentioned figure would be 60%.
Peter Arkell, chairman of the Global Mining Association of China, said that it is not surprising that Beijing has responded to the growing restrictions from the US authorities, current and imminent, with its own measures of a similar nature regarding shipments of strategic minerals. It was also noted that this is a trade war in which there are no winners.
Within the framework of theoretical reasoning, it would be fair to say that any restrictions on export activities mean certain losses for both sides of the relevant interaction, which in the context of limiting is gradually transformed into a kind of bilateral isolation or, at least, some degree of corresponding state of affairs. Shipments of goods and minerals are the source of revenues for countries. Restrictive measures either reduce or completely cancel the economic effect of the mentioned activity. For companies from Western countries, decreasing the scale of interaction with the Chinese market or completely ceasing business in this region is a sensitive factor affecting their financial performance, in the context of the dynamic of which curbing means the beginning of a downward trajectory. In this case, the downturn will not necessarily be critical, but it will definitely be noticeable and will not become a fact that can be ignored. At the same time, export activities are an important source of replenishment of the state treasury for any country. The potentially negative effect of the termination of shipments to a certain region can be offset by the diversification of supplies to other trading partners. In the context of interaction with the United States, this opportunity is significantly weakened. The US market is one of the largest in the world, which means that it is extremely difficult to replace the termination of cooperation with customers from this commercial space by starting collaboration with other countries without financial losses. For the Chinese economy, which is in a dire position, partially losing growth momentum, the completion of shipments to the United States is likely to be a sensitive factor.
