China’s Gallium Expansion Slows as Germanium Supply Diversifies: Key Market Insights

China Nonferrous Metals Industry Association (CNMA)

The Chinese gallium (Ga) production expansion has encountered significant hurdles, while germanium (Ge) supply sources are increasingly diversifying to mitigate feedstock shortages. According to Li Yilan, a senior analyst at the China Nonferrous Metals Industry Association (CNMA), the pace of new gallium production projects in China has slowed due to decreasing Ga content in bauxite, the primary feedstock for gallium extraction. As a result, many production projects have been delayed, and some that did launch have scaled back or halted operations altogether. However, the diversification of germanium supply chains signals a shift in how the industry is adapting to global demand pressures.

Slowdown in Gallium Production Expansion

China’s gallium output for 2024 is forecast to reach 950 tons, a 14% increase compared to the previous year. Despite this increase, the growth rate of gallium production capacity has slowed considerably. In particular, China’s gallium capacity rose by 40% this year, but the full realization of this capacity has been hindered by difficulties in securing sufficient feedstock from bauxite. The lower Ga content in bauxite has made it harder for producers to maintain a consistent supply of gallium, forcing many projects to delay their timelines or reduce output.

The demand for gallium, particularly from the magnet manufacturing sector (which consumes 46% of the metal), has increased gradually over the past two years. Additionally, the rise in demand for gallium oxide phosphor in electronics has offset the reduced demand from the solar cell sector. This demand shift has been a key factor in the slight increase in Chinese gallium exports, which rose by 35% year-on-year in the first three quarters of 2024, totaling 48.4 tons. This increase is partly due to disruptions in last year’s exports caused by the country’s export control schemes, which limited overseas shipments.

Germanium Supply Diversification and Emerging Markets

While gallium production faces slowdowns, germanium’s supply chain is showing signs of diversification, especially as producers look beyond China for feedstock. Tight feedstock availability in China has prompted several producers to seek alternative sources for germanium. Notably, the Democratic Republic of the Congo’s state-owned mining company, Gecamines, has begun exporting germanium concentrates to Belgium. This move is part of a broader trend of extracting germanium from non-traditional sources, such as copper-cobalt ores in the Congo and coal and nickel in Indonesia. These new extraction routes are expected to increase the overall supply of germanium.

China’s germanium output is projected to exceed 200 tons in 2024, up from 190 tons the previous year. Strong demand from the infrared and solar cell sectors, which use germanium in various applications, has driven prices upward in recent months. However, the rapid rise in prices has caused a significant drop in exports. Between January and September 2024, China exported just 18.8 tons of germanium, a 46% decrease compared to the same period in 2023. Higher prices and more stringent export license procedures have pushed international buyers to explore other sources for germanium, further boosting the trend toward diversified supply.

Conclusion

The global markets for gallium and germanium are undergoing significant shifts, with production challenges in China affecting gallium’s expansion and leading to a diversification of germanium supply chains. While gallium demand remains steady, especially from magnet and phosphor industries, production issues are slowing the pace of growth. On the other hand, germanium's increasing extraction from countries like the Democratic Republic of the Congo and Indonesia is easing the reliance on Chinese supply. The metal markets are adapting, and these dynamics will likely continue to influence pricing and production trends in the coming years.

China's Magnesium Sector Faces Oversupply and Price Challenges Despite Rising Output

China's Magnesium

China’s magnesium industry, which accounts for a staggering 83% of the world’s magnesium production, is grappling with challenges of oversupply and volatile prices, according to insights shared at the 27th annual conference of the China Magnesium Association (CMA) held in Xi'an.

Decade-Long Capacity and Utilization Issues

Over the past decade, China’s magnesium production capacity has ranged between 1.3 million and 1.5 million tonnes per year (t/yr). However, actual output has lagged behind at 800,000 to 1 million t/yr, resulting in an average utilization rate of just 63%, according to data from the China Nonferrous Metals Industry Association (CNMA).

Dependence on Traditional Sectors

The sector’s primary consumption is still tied to traditional industries like aluminium alloys, steel, and titanium sponge. Attempts to diversify into new applications, such as magnesium alloy construction sheets, consumer electronics, and new energy vehicles, have been slow. This limited innovation has contributed to an oversupply and pushed magnesium prices to near production costs.

Shifting Trends in Titanium Sponge Production

The use of magnesium in titanium sponge production has declined due to its environmental impact and price volatility. According to Jiang Baowei, lead engineer at Pangang Vanadium and Titanium Resources, many producers now use in-house magnesium obtained through electrolysis of titanium tetrachloride residue, reducing environmental pollution and stabilizing costs. In 2023, China’s titanium sponge production capacity reached 220,000 t/yr, supported by 250,000 t/yr of in-house electrolytic magnesium production.

Rising Production Amid Challenges

Despite these hurdles, China’s magnesium production rose to 702,900 tonnes during January-September 2024, an 18% year-on-year increase, fueled by resumed production in Shaanxi, the country’s largest magnesium-producing region. Output in Shaanxi grew by 14%, while neighboring Shanxi saw a 10% rise. Shaanxi alone houses 50 producers with a combined capacity of 678,000 t/yr, including 34 producers in Fugu County.

CMA’s Call to Action

Ge Honglin, CNMA president, urged the industry to emphasize magnesium’s benefits as a light structural metal and explore emerging markets like hydrogen storage and new energy vehicles. He also called for price stabilization to ensure affordability and reduce market volatility.

Sustainable Production Gains

The industry has made strides in energy efficiency, reducing the energy required to produce 1 tonne of magnesium from 5.2 tonnes of standard coal in 2012 to just 4 tonnes in 2023. Over the same period, magnesium consumption in structural materials more than doubled to 192,100 tonnes, contributing to a sharp rise in overall consumption, up by 76% since 2012.

China’s magnesium sector continues to grow in global prominence, but it faces an urgent need to diversify its applications, reduce environmental impacts, and stabilize pricing to maintain its leadership in the global market.

Banchao Magnesium Builds New Magnesium Plant in Xinjiang’s Hami City

Magnesium

Expansion Targets 2026 Launch Amid Growing Regional Output

Xinjiang Banchao Magnesium has started building a new magnesium plant in Hami, a key resource hub in northwest China’s Xinjiang province. Construction began on 1 March and is scheduled for completion by the end of 2025, with production expected in 2026.

The facility is designed to produce 20,000 tonnes/year of magnesium metal and 30,000 tonnes/year of magnesium alloy. The project reflects rising demand for lightweight metals used in automotive, aerospace, and green energy applications.

Banchao Magnesium is a subsidiary of Xinjiang Banchao, active in coal and non-ferrous metals mining as well as solar and wind power generation.

Xinjiang’s Magnesium Output Rises Sharply in 2024

The new Hami plant adds to Banchao’s five existing facilities, which already produce 20,000 t/yr of magnesium metal, 1.2 million t/yr of carbon products, and 600,000 t/yr of coke.

According to the China Nonferrous Metals Industry Association (CNMA), China’s magnesium metal output reached 953,100 tonnes in 2024, marking a 16% year-on-year increase.

Xinjiang province alone produced 86,300 tonnes, up 26% year-on-year, thanks to its rich dolomite and coal reserves—essential inputs for magnesium smelting. Most of the region’s magnesium facilities are concentrated in Hami due to resource accessibility and industrial infrastructure.

Xinjiang Jinsheng Also Expands Magnesium Capacity

Another local producer, Xinjiang Jinsheng, is constructing phase two of its Hami plant, adding 35,000 t/yr of capacity. Construction started in April 2024, with production scheduled for 2026.

Jinsheng’s first-phase plant, operational since 2011, reached full utilization in 2024, producing 20,000 tonnes/year. This continued regional investment reinforces Xinjiang’s strategic position in China's magnesium supply chain.

As global industries seek lightweight, sustainable metals, Xinjiang’s magnesium sector is poised for further growth.