Yunnan Germanium Output Falls as Downstream Wafer Demand Absorbs Metal

Germanium

Yunnan Germanium output of raw material-grade germanium available for external sales fell in 2025 as the company redirected more metal into internal downstream production. The shift reflects stronger demand from photovoltaic wafers, optical fibre materials and compound semiconductor products.

Yunnan Germanium output for external raw material-grade germanium sales fell by 13% to 29.7t metal equivalent. The figure excludes 68.95t used for internal consumption and third-party processing.

Yunnan Germanium output therefore signals a change in material allocation rather than simple production weakness. More germanium units are being retained inside the company’s higher-value product chain instead of being sold as raw material.

Revenue rose by 38% to 1.07bn yuan, supported by higher prices for raw germanium, optical fibre materials, PV germanium products, infrared products and semiconductor products.

PV and Optical Fibre Demand Pull Germanium Into Internal Processing

Yunnan Germanium nearly doubled production of 4-6 inch PV-grade germanium wafers in 2025. Output rose to 909,000 pieces from 491,400 pieces a year earlier.

This growth is strategically important because germanium wafers serve high-efficiency photovoltaic applications. Stronger wafer output means more raw germanium is being converted into higher-value products rather than sold into the merchant market.

Optical fibre materials also expanded. Output of optical fibre-grade germanium tetrachloride rose to 39.8t from 27t, showing stronger demand from communications infrastructure and optical transmission markets.

Infrared-grade germanium raw material output fell by 28% to 4.77t metal equivalent. However, production of infrared lenses and optical systems rose sharply to 4,717 sets from 1,828 sets.

That mix shows deeper downstream processing. The company reduced some raw infrared material output but increased finished optical systems, capturing more value further along the chain.

For germanium buyers, the key issue is external availability. When China’s largest germanium producer consumes more material internally, less raw metal is available for third-party customers.

Indium Phosphide Expansion Strengthens Compound Semiconductor Push

Yunnan Germanium also increased indium phosphide wafer output in 2025. Production of 2-4 inch InP wafers rose by 55% to 100,100 pieces.

In contrast, gallium arsenide wafer production declined by 13% to 76,300 pieces. This shows a shift in compound semiconductor emphasis toward InP, where demand is rising from advanced optical and semiconductor applications.

The company plans to keep increasing PV-grade germanium wafer and indium phosphide wafer output in 2026. It also plans to reduce infrared product output.

Yunnan Germanium targets 73t metal equivalent of raw material-grade germanium products in 2026, including internal use and third-party processing. It also plans to produce 1.45mn pieces of 4-6 inch equivalent PV-grade wafers and 180,000 pieces of 2-6 inch InP wafers.

The company also plans to produce 35t of optical fibre-grade germanium tetrachloride, 80,000 pieces of 3-6 inch GaAs wafers, 3t of infrared-grade germanium raw materials and 8,000 sets of infrared lenses and optical systems.

The planned 188.56mn yuan investment to expand high-quality InP single-crystal wafer capacity reinforces this strategy. Yunnan Germanium is moving from raw germanium supply toward integrated semiconductor and photonics material production.

The Metalnomist Commentary

Yunnan Germanium’s lower external metal output should not be read as weak demand. It shows that strategic germanium producers are capturing more value internally, tightening merchant supply while expanding into PV, optical fibre and InP wafer markets.

Yunnan Germanium Recycling Project Targets Feedstock Security for Strategic Metal Supply

Germanium Scrap

Yunnan Germanium recycling project plans will strengthen China’s largest germanium producer’s control over feedstock as demand from downstream high-end manufacturing remains strategically important. The company plans to invest 200.66mn yuan in a fully automated facility to process germanium-bearing waste slag.

The Yunnan Germanium recycling project will have capacity to process 150,000 t/yr of germanium-bearing waste slag. The company has not disclosed the construction timetable or launch date.

The Yunnan Germanium recycling project is designed to improve germanium resource utilisation and support raw material supply for downstream deep-processing products. This matters because germanium is a strategic minor metal used in defence, infrared optics, fibre optics, semiconductors and high-performance electronics.

The project also reflects a broader industry shift. Producers of critical and minor metals are increasingly trying to secure secondary feedstock as primary supply becomes more politically controlled and price volatility rises.

Recycling Capacity Reduces Dependence on External Raw Materials

Yunnan Germanium said partial reliance on externally sourced raw materials exposes it to germanium price volatility. Prices are influenced by global supply-demand conditions and demand from high-end manufacturing sectors.

The new recycling line should help reduce that exposure. By processing waste slag, the company can recover more germanium units from secondary material and support its downstream production chain.

This is strategically important because Yunnan Germanium already consumes significant germanium internally. In 2025, the company produced 29.7t of raw-material-grade germanium metal equivalent for external sales, excluding 68.95t used for internal consumption and third-party processing.

That internal use shows how the company is moving more material into higher-value products rather than selling all output into the merchant market. Recycling can strengthen that model by expanding available feedstock.

Yunnan Germanium also plans to diversify external suppliers of germanium-bearing waste slag. It will seek medium- to long-term supply agreements with quality provisions and emergency replenishment clauses.

The company also plans to build a raw material inventory reserve and a price-alert mechanism. It will adjust production and inventory strategies when germanium prices move by more than 10%.

These measures show a more disciplined approach to minor-metal procurement. In markets such as germanium, small disruptions can produce large price movements because supply is concentrated and liquidity is limited.

Export Controls Increase Strategic Value of Germanium Recovery

Germanium has become more strategically sensitive since China placed the metal under strict dual-use export controls in September 2023. China accounts for an estimated 60-70% of global germanium capacity.

This gives Chinese producers significant influence over global availability. It also makes domestic resource recovery more valuable, especially when export controls, defence demand and semiconductor-related applications increase policy attention.

Yunnan Germanium’s revenue rose to 1.07bn yuan in 2025 from 767mn yuan in 2024. Higher prices for key products, including raw-material-grade germanium, supported the increase despite lower external raw metal output.

The company’s recycling investment therefore supports both security and profitability. More stable feedstock access can improve operating flexibility when prices rise or external raw material supply tightens.

For downstream customers, the project may improve Yunnan Germanium’s ability to supply deeper-processed products. These include materials linked to optics, fibre communication, photovoltaics, infrared systems and compound semiconductors.

The broader market implication is clear. Germanium supply security will depend not only on mine output or primary production, but also on recycling, waste recovery, inventory control and long-term feedstock agreements.

The Metalnomist Commentary

Yunnan Germanium’s recycling plan shows that strategic minor metals are moving toward closed-loop resource control. In germanium, the advantage will belong to producers that can combine primary supply, secondary recovery and downstream processing under one feedstock strategy.

EU Selects 13 Strategic Raw Material Projects Outside the Bloc

EU strategic raw material projects

EU Seeks to Diversify Critical Mineral Supply Chains

The European Commission has approved 13 strategic raw material projects outside the European Union, estimating a total capital investment of €5.5bn ($6.26bn) to bring them online. Chosen from 49 applications, these projects span Brazil, Canada, Greenland, Kazakhstan, Madagascar, Malawi, New Caledonia, Norway, Serbia, South Africa, the UK, Ukraine, and Zambia. Under the 2024 EU Raw Materials Act, the bloc aims by 2030 to domestically extract 10pc, process 40pc, and recycle 25pc of 17 strategic raw materials. Additionally, no single third country should supply more than 65pc of annual EU consumption.

Targeting Lithium, Nickel, Cobalt, Manganese, and Rare Earths

Ten of the approved projects focus on lithium, nickel, cobalt, manganese, and graphite, while two — Songwe Hill in Malawi and Zandkopsdrift in South Africa — will extract rare earth elements. Other notable initiatives include Rio Tinto’s Jadar lithium and boron project in Serbia, the Integrated Dumont Nickel Project in Canada, Kobaloni Energy’s cobalt processing in Zambia, and Balakhivka Graphite Deposit in Ukraine. The EU will provide coordinated support, including facilitating finance and connecting projects with potential off-takers. Industrial commissioner Stephane Sejourne emphasised that diversifying away from dependency on countries like China is critical, given current reliance levels exceeding 100pc in some refining and recycling segments.

The Metalnomist Commentary

The EU’s latest selections mark a significant expansion of its global strategic raw material network, signalling an urgent push to secure supplies ahead of the 2030 targets. While the €5.5bn investment is substantial, long-term success will depend on execution speed, environmental considerations, and stable geopolitical relations with host nations.

Zhangyuan Tungsten Sales Rise as Manufacturing Demand Supports Downstream Products

Zhangyuan Tungsten

Zhangyuan tungsten sales increased in 2025 as robust manufacturing demand lifted shipments of tungsten powder, tungsten carbide and cemented carbide products. The Chinese producer sold 4,928t of tungsten powder during the year, up 24% from 2024.

Zhangyuan tungsten sales also rose across higher-value downstream products. Tungsten carbide sales increased by 18% to 5,812t, while cemented carbide sales climbed by 20% to 1,363t.

Zhangyuan tungsten sales show that demand for cutting tools, industrial components and hard materials remained firm even as raw material prices corrected from record highs. The result highlights the importance of downstream tungsten products in China’s manufacturing supply chain.

Cemented carbide bar sales rose by 16% to 893t. Cemented carbide cutter sales also recovered strongly, reversing a 3% decline in the first half of 2025 to end the year up 22% at 27.11mn pieces.

Downstream Capacity Outpaces Internal Concentrate Supply

Zhangyuan has significant downstream tungsten capacity. The company has nameplate capacity of 12,000 t/yr of ammonium paratungstate, 15,000 t/yr of tungsten powder and 13,000 t/yr of tungsten carbide.

That scale makes the company a major consumer of tungsten raw materials. Its own tungsten concentrate output is not enough to meet internal demand, so it relies on external feedstock including APT and tungsten concentrate.

Zhangyuan produced 3,691t of tungsten concentrate in 2025, down slightly by 48t from a year earlier. This small decline reinforces the company’s dependence on purchased raw materials to support its downstream operations.

The operating structure matters because tungsten producers with strong downstream demand still face raw material exposure. Concentrate and APT availability can affect margins, procurement timing and product pricing.

Tungsten is strategically important for cemented carbide tools, drilling equipment, machining, aerospace, defence, electronics and high-performance industrial applications. Stronger sales from Zhangyuan therefore reflect continued demand from China’s manufacturing base.

Price Correction Slows Feedstock Buying After Record Highs

Zhangyuan lowered its term bidding price for 55% tungsten concentrate to 845,000 yuan/t for the second half of April, down from 930,000 yuan/t in the first half of the month. Its APT bidding range also fell to 1.35mn yuan/t from 1.44mn yuan/t.

The move reflected a wider correction in China’s tungsten market. Prices for 65% wolframite concentrate fell sharply after reaching record highs in March, while APT prices also declined over the same period.

Market participants reported limited spot deals and fewer term deliveries. Buyers slowed feedstock purchases because they expected further downward price corrections after the earlier price surge.

This creates a short-term tension in the tungsten chain. Downstream demand remains supported by manufacturing activity, but raw material buyers are cautious because prices moved too far too quickly.

For Zhangyuan, the key challenge is balancing strong downstream sales with disciplined feedstock procurement. If raw material prices continue to fall, margins may improve for processors that avoid overbuying at peak levels.

The broader market signal is clear. Tungsten demand remains industrially strong, but price volatility can disrupt buying behaviour across the concentrate, APT, powder and carbide chain.

The Metalnomist Commentary

Zhangyuan’s results show that China’s tungsten demand is being driven by downstream manufacturing, not only raw material speculation. The price correction may cool feedstock buying, but cemented carbide and cutting tool demand still point to tungsten’s strategic role in industrial production.

Trafigura Egyptalum Aluminium Smelter Plan Expands Egypt’s Primary Aluminium Ambition

Trafigura

Trafigura Egyptalum aluminium smelter plans could add a major new primary aluminium production base in Egypt, as commodity trader Trafigura enters exclusive negotiations with Egyptalum and Metallurgical Industries Holding. The proposed project would produce 300,000 t/yr of primary aluminium at Egyptalum’s Nag Hammadi complex.

The Trafigura Egyptalum aluminium smelter project is expected to cost $750mn-900mn. It would also include a 150,000 t/yr anode plant, giving the new facility a more integrated raw material and consumables base.

The Trafigura Egyptalum aluminium smelter plan shows how commodity traders are moving deeper into asset-backed metals supply. Trafigura would act as a minority equity investor, debt provider, raw material supplier and long-term offtake partner.

The agreement also reflects a broader shift in aluminium. Trading houses are no longer only moving metal through global markets. They are helping finance new production capacity, secure offtake and shape where future aluminium units will flow.

Nag Hammadi Project Could Strengthen Egypt’s Aluminium Chain

The proposed smelter would be built at Egyptalum’s existing Nag Hammadi complex. This gives the project an industrial base rather than starting from a completely new site.

A 300,000 t/yr primary aluminium smelter would materially expand Egypt’s aluminium production capability. It would also support local value creation if linked to downstream manufacturing, construction, packaging, transport and electrical applications.

The planned 150,000 t/yr anode plant is strategically important. Carbon anodes are essential consumables in aluminium smelting, and supply reliability can affect operating continuity, production cost and quality.

Primary aluminium is highly power-intensive. This means the project’s competitiveness will depend on electricity pricing, energy reliability, carbon intensity, alumina supply, anode quality and logistics.

Trafigura’s role could help reduce commercial risk. By providing debt, raw materials and long-term offtake, the trader can give the project stronger financing and market access support.

This structure also benefits Trafigura. Long-term offtake gives the company access to physical aluminium units in a market where regional supply disruptions, tariffs and energy costs are increasingly shaping trade flows.

Trading Houses Move Further Into Aluminium Capacity

The Egypt agreement follows Trafigura’s recent investment alongside Glencore and Mercuria in an 800,000 t/yr aluminium smelter in Indonesia being developed by Tsingshan. Together, these moves point to a more aggressive strategy by major traders in aluminium supply.

The logic is clear. Aluminium is becoming more strategic because it supports transport, packaging, power grids, construction, renewable energy and defence-linked manufacturing.

At the same time, primary aluminium supply is constrained by power availability, high capital costs and limited restart options in several western markets. New capacity in energy-competitive regions is therefore gaining more commercial importance.

Egypt offers a potentially strategic location between Europe, the Middle East and Africa. If the project advances, it could serve both regional demand and export markets, depending on cost structure and product mix.

For Egyptalum and MIH, the partnership could bring capital, raw material access and international marketing capability. For Trafigura, it creates another long-term aluminium flow linked to financing and offtake control.

The project remains at the negotiation stage. Its final impact will depend on shareholder structure, financing terms, power arrangements, construction timing and operating economics.

Still, the industrial message is significant. Aluminium investment is increasingly being driven by integrated finance, raw material supply and offtake strategy rather than simple capacity announcements.

The Metalnomist Commentary

Trafigura’s Egyptalum talks show that aluminium capacity is becoming a strategic financing business. The next winners in aluminium will be those that can combine energy access, raw material control, anode supply and long-term offtake.

Lopal Marble Bar Lithium Project Deal Extends Chinese Battery Material Supply Strategy

Lopal

Lopal Marble Bar lithium project acquisition will give China’s battery cathode material producer Lopal Tech another upstream position in Western Australia’s lithium sector. The company has agreed to acquire the Marble Bar project from Global Lithium Resources for A$14.85mn.

The Lopal Marble Bar lithium project is located in the Pilbara region of Western Australia. The project has an estimated resource of 18mn t grading 1.0% lithium oxide.

The Lopal Marble Bar lithium project deal reflects a continuing push by Chinese battery material producers to secure upstream lithium resources. Cathode and battery material companies are looking beyond processing capacity and moving closer to mine supply.

This matters because lithium raw material security remains central to battery supply chains. Even as lithium prices fluctuate, companies with long-term access to spodumene resources can better protect conversion plants, cathode output and customer supply.

Marble Bar Adds Pilbara Resource Exposure

The Marble Bar project gives Lopal direct exposure to a known lithium-bearing region. Western Australia remains one of the world’s most important hard-rock lithium supply bases, with spodumene projects feeding converters and battery material producers across Asia.

The project’s 18mn t resource at 1.0% lithium oxide gives Lopal a potential raw material position, although the acquisition price suggests the asset is still at an early development stage.

For Global Lithium Resources, the sale allows the company to focus more heavily on its larger Manna lithium project. Manna has a resource estimate of 52mn t grading 1.0% lithium oxide.

This creates a clearer portfolio structure. Lopal gains Marble Bar, while GL1 retains its larger Manna asset and existing downstream-linked partnerships.

The transaction also shows that Chinese battery material producers remain willing to invest in Australian lithium assets despite market volatility. Long-term supply security continues to matter more than short-term price weakness.

Manna Links Lopal to Future Offtake Supply

Lopal already has exposure to GL1 through the Manna project. It holds a 5% equity interest in Manna and has signed an offtake agreement to buy 40% of the project’s output.

China’s Canmax has agreed to take another 30% of Manna’s output and also holds a 9.45% stake in GL1. Australian lithium miner Mineral Resources owns 9.85% of GL1.

These relationships show how lithium supply chains are being structured around equity stakes and offtake agreements. Battery material companies want secured feedstock before projects enter production.

For Lopal, the Marble Bar acquisition adds another layer to its Australian lithium strategy. It gives the company project ownership while maintaining future offtake exposure through Manna.

The broader industrial meaning is clear. Chinese battery material producers are not relying only on spot markets. They are building upstream positions, offtake rights and strategic relationships to support long-term lithium chemical and cathode material supply.

The Metalnomist Commentary

Lopal’s Marble Bar deal shows that lithium strategy is shifting from price speculation to resource control. Even in a weaker lithium market, Chinese battery material companies continue to secure upstream positions that can support future conversion and cathode supply.

Spain Critical Raw Materials Plan Targets Mining Supply Chain Revival

Spain Mining

Spain critical raw materials policy is moving into a more active phase as the government prepares to invest €414 million to strengthen domestic mining and raw material supply. The funding will support recycling, mineral exploration, abandoned mine restoration, and workforce training across the Spanish mining sector.

The plan reflects Europe’s wider push to reduce dependence on imported critical minerals. Spain already holds an important position in the EU mining landscape. It ranks as the bloc’s second-largest copper producer and third-largest tungsten producer, giving the country a stronger base than many European peers.

Spain critical raw materials investment also comes as the EU accelerates project selection under the Critical Raw Materials Act. The European Commission has selected seven strategic mining and raw material projects in Spain, placing the country just behind Germany and France in the European project pipeline.

National Exploration Program Signals a Return to Resource Strategy

The most important part of the plan is Spain’s first National Mining Exploration Program in 50 years. The government plans to allocate €182 million to the program, marking a major shift from passive resource ownership to active resource development.

Exploration is critical because Europe’s raw material strategy cannot rely only on known deposits. Copper, tungsten, lithium, rare earths, and other strategic minerals require long development timelines. Without fresh exploration, permitting reform, and financing support, Europe’s supply ambitions will remain exposed to overseas sources.

Spain’s geological position gives the program clear industrial relevance. Copper supports power grids, electrification, renewable energy systems, and industrial manufacturing. Tungsten remains important for hard metals, defense applications, aerospace tooling, and high-performance manufacturing. As a result, the Spanish mining sector could become more strategically important to Europe’s energy transition and industrial security.

Financing Risk Remains the Main Barrier for Spanish Mining Projects

Spain critical raw materials funding addresses a long-standing complaint from mining companies. Industry players have asked for clearer financial and regulatory support because many emerging projects remain stalled despite strong policy interest.

The core problem is risk. Mining projects require large upfront capital, long permitting processes, and uncertain development timelines. Banks and investors often hesitate to provide credit lines, especially for early-stage projects that lack proven production economics.

The new funding can help reduce that gap, but it will not solve every obstacle. Spain must still convert policy support into bankable projects, faster approvals, skilled labor, and reliable infrastructure. If the government succeeds, the Spanish mining sector could become a stronger pillar of Europe’s critical raw materials strategy.

The Metalnomist Commentary

Spain’s plan is strategically important because it links exploration, recycling, and mine restoration into one raw materials agenda. However, the decisive test will be whether public funding can unlock private capital for projects that banks still view as too risky.

US Critical Mineral Processing Funding Targets Domestic Battery Supply Chain

Critical Mineral

US critical mineral processing funding is moving into another major round as the Department of Energy prepares to allocate up to $500mn for processing, recycling, and derivative battery manufacturing projects. The funding opportunity is designed to support US-based projects that can strengthen domestic supply of critical minerals and battery materials.

The Department of Energy will target projects that process raw feedstocks, recycle critical materials, or manufacture battery materials and components. The agency specifically identified battery-related materials such as lithium, graphite, nickel, copper, and aluminum among its areas of focus.

US critical mineral processing funding is becoming a central tool in Washington’s effort to reduce dependence on offshore refining and battery material supply chains. The latest funding round also shows that the US is not only focused on mining, but on the midstream capacity needed to convert raw materials into usable industrial inputs.

DOE Funding Pushes Midstream Capacity Beyond Mining

Critical mineral processing remains one of the most difficult gaps in the US battery supply chain. Mining projects can expand raw material availability, but domestic industrial resilience depends on refining, chemical conversion, recycling, and component manufacturing.

The new funding opportunity will support projects that can process critical minerals from raw feedstocks and recycle valuable materials back into the supply chain. This approach reflects the growing importance of black mass, scrap, and secondary materials as strategic inputs for battery production.

DOE battery materials funding also gives policy support to companies working across lithium chemicals, graphite processing, nickel products, copper materials, aluminum inputs, and battery component manufacturing. These segments are essential for electric vehicles, grid storage, defense electrification, and industrial energy systems.

Battery Manufacturing Policy Enters Third Funding Round

The latest funding notice marks the third round in recent years under the DOE’s battery materials processing and battery manufacturing and recycling programs. In September 2024, the agency selected 25 projects to receive more than $3bn to expand domestic battery, component, and critical material supply.

The new $500mn opportunity extends that policy direction. It gives the US another mechanism to move from strategic mineral rhetoric toward physical processing capacity, especially in areas where China still dominates global refining and battery material production.

Applicants must submit non-binding letters of intent by 27 March, with full applications due by 24 April. The timeline signals that the DOE wants near-term project visibility and a faster pipeline of investable domestic capacity.

US critical mineral processing funding will be especially important for companies that can prove commercial readiness, feedstock security, and scalable production. The strongest projects will likely be those that connect raw material access with downstream battery customers and recycling loops.

The Metalnomist Commentary

The US is now treating processing capacity as the real bottleneck in critical minerals security. Funding can accelerate projects, but the strategic test will be whether supported companies can deliver cost-competitive, qualified material at industrial scale.

Indian Stainless Steel Sector Faces Headwinds from Imports and Raw Material Volatility

ISSDA

India’s stainless steel sector may face short-term turbulence amid rising imports and fluctuating input costs, says the ISSDA.

Rising Imports and Raw Material Volatility Challenge Growth

The Indian Stainless Steel Development Association (ISSDA) warns that the domestic stainless steel sector could face challenges in early FY2025-26. Volatile prices for nickel and ferro-chrome, coupled with low-cost imports from China and Vietnam, are pressuring Indian producers. According to ISSDA president Rajamani Krishnamurti, these imports threaten local manufacturers’ margins and growth momentum.

However, India’s strong domestic demand and supportive government policies may offer some market stability. Still, the industry remains vulnerable to global supply chain disruptions and raw material dependency, particularly on Indonesian nickel.

Capacity Expansion and Infrastructure Demand Drive Optimism

Despite the headwinds, India’s stainless steel industry remains optimistic for FY2025-26.

The country’s installed capacity of 7.5 million t/yr remains underutilized, with 40% unused, but new investments aim to close this gap. Growth drivers include infrastructure development, urbanization, and Make in India initiatives.

The railways, construction, and public-private infrastructure projects are expected to boost stainless steel consumption. Additionally, renewable energy technologies such as solar panels and wind turbines present promising applications for stainless steel. The sector also sees long-term growth potential from green hydrogen and smart city development projects.

The Metalnomist Commentary

India’s stainless steel sector sits at a crossroads. Structural demand remains intact, but trade dynamics and global price shifts threaten stability. How India balances domestic capacity utilization, import regulation, and supply chain resilience will shape the industry’s mid-term outlook.

Press Metal Reports 40% Profit Surge in 2024 Amid Strong Aluminium Demand and Vertical Integration Push

Press Metal Holdings

Higher Value-Added Sales and New Indonesian Alumina JV Offset Raw Material Pressures

Press Metal Delivers Record Earnings in 2024 Despite Raw Material Challenges

Malaysia’s largest aluminium producer, Press Metal Holdings, posted a 39.82% increase in pre-tax profit in 2024, reaching 2.3 billion ringgit ($519.3 million). This growth came on the back of rising aluminium prices and strong demand for value-added products, although higher alumina costs dampened some of the gains.

Annual revenue rose by 8% year-on-year to 14.91 billion ringgit, with fourth-quarter profits up 24% to 542.5 million ringgit, as reported by the company. Q4 revenue inched up 0.73% to 3.56 billion ringgit, signaling steady market demand despite input cost volatility.

Strategic JV in Indonesia Strengthens Upstream Position

To manage raw material price swings, Press Metal launched a strategic joint venture in West Kalimantan, Indonesia, in September 2024. The project involves the development of an integrated alumina refinery and supporting infrastructure, aimed at enhancing upstream control and reducing exposure to global bauxite and alumina supply risks.

CEO Koon Poh Keong noted that although alumina prices have begun to ease, policy uncertainties around bauxite sourcing continue to pose risks. The company’s vertical integration strategy is designed to boost operational resilience and protect margins against market fluctuations.

Aluminium Demand Remains Strong Across Traditional and Green Sectors

Looking ahead, Press Metal remains optimistic, citing a balanced aluminium market supported by robust investment across sectors. Demand continues to grow in clean energy, electric vehicles, grid infrastructure, and battery storage, in addition to traditional industrial uses.

By reinforcing its supply chain integration, Press Metal is positioning itself to sustain profitability while adapting to raw material cost dynamics and evolving end-market trends.

European Stainless Tube Trade Shifts as Policy, Imports and Data Centres Reshape Demand

European Stainless Steel

European stainless tube trade is entering a more selective phase as producers defend margins through higher-value applications, tighter specifications and regional supply advantages. The market remains stable, but it is no longer driven mainly by volume growth.

European stainless tube trade is being reshaped by three forces at once. Imports continue to pressure commodity and process pipe segments. Policy measures such as CBAM and revised safeguards are changing cost structures. At the same time, automotive exhaust demand is declining as electrification advances.

Speakers at SMR’s Stainless Steel Tube and Pipe Market Insights Day in Dusseldorf said Europe is behaving like a mature and cyclical market. Asia remains the main centre of stainless steel consumption and commodity production, while Europe depends more on technical applications, certification and regulatory positioning.

European stainless tube trade is therefore moving away from simple price competition. Producers are increasingly competing on quality, traceability, sustainability, lead times and the ability to serve complex end uses.

Italy-based Marcegaglia Specialties said traditional sectors such as construction, energy, oil and gas, automotive, water and food processing remain the backbone of demand. However, the next stage of competition will depend more on sustainability and product complexity than on basic market expansion.

CBAM and Import Pressure Are Regionalising Stainless Tube Supply

European stainless tube trade is becoming more regional because policy and geopolitics are increasing the value of local supply. CBAM, revised safeguard measures and wider instability are pushing buyers to look more carefully at origin, emissions, delivery risk and compliance.

European producers already operate inside the EU regulatory framework. This gives them an advantage in some higher-value applications where customers require reliable documentation, stable quality and shorter supply chains.

But the policy environment is not simple. Some industry speakers warned that CBAM could become more protectionist than environmental if it raises costs for European downstream processors without fully addressing import competition.

This concern is especially relevant for stainless tube makers. They buy input material under EU cost structures, but still compete with imported finished or semi-finished products in certain market segments.

OSTP chief executive Andrea Gatti argued that CBAM and revised tariff-rate quotas are creating a difficult environment for downstream processors. He said the measures can raise raw material costs for European producers while leaving import pressure unresolved in some product categories.

One concern is the way carbon steel and stainless steel products remain grouped in some quota categories. This can obscure the real level of import pressure in specific stainless segments.

The issue is most visible in process pipe. Overall import penetration in European welded stainless pipe may look moderate, but import pressure is much stronger in process pipe than in automotive or structural applications.

Some imported process pipe is arriving at prices close to European producers’ raw material costs. This creates a serious margin problem for EU producers, especially when they must meet higher regulatory, labour and energy costs.

Asian imports are particularly competitive in pipe and fittings made to ASTM specifications. Around 15-20% of the European market still requires ASTM-based products, often because older engineering standards and end-user specifications remain in place.

This creates an opening for Asian suppliers. Many have long experience producing ASTM-based products and can compete aggressively in segments where buyers focus mainly on price and basic compliance.

Asian producers are also becoming more capable of supplying European-standard material. However, some barriers remain. Hot-rolled feedstock availability, customer qualification and more complex technical requirements still protect parts of the European market.

CBAM adds another layer of uncertainty. Importers and buyers still lack full visibility on the actual carbon values that overseas suppliers will declare. Some emissions disclosures remain incomplete or unreliable.

This creates pricing uncertainty. If importers use default emissions values, CBAM costs may rise sharply. If suppliers provide certified actual data, costs may be lower. But the market does not yet know which overseas suppliers can verify emissions credibly.

For European producers, this uncertainty is both an opportunity and a risk. It may make some imports less attractive, but it also complicates raw material sourcing and customer negotiations.

The broader result is regionalisation. Buyers are increasingly weighing whether cheaper imported material is worth the compliance, delivery and emissions risk. European producers can benefit if they turn regulation into a trusted supply advantage.

However, they cannot rely on regulation alone. Imports will continue to pressure standard grades and process pipe where price remains decisive. Europe’s defence must therefore come from technical capability, service and qualification depth.

Automotive Decline and Data Centres Redefine Growth Applications

European stainless tube producers also face structural demand change in automotive applications. Exhaust-related stainless tube demand is declining as electric vehicle adoption reduces the long-term need for combustion engine systems.

German tubemaker Schoeller Werk said about 40% of its business is still linked to automotive. Around 95% of that automotive exposure is tied to combustion engine applications.

This creates a clear transition risk. Combustion engine exhaust systems have historically used stainless tube because of heat resistance, corrosion performance and durability. Electric vehicles remove much of that demand.

Industry speakers described this shift as irreversible, even if the speed varies by region. Combustion vehicles may remain relevant for some years, but the structural direction is clear.

Marcegaglia also described the shift away from combustion-engine vehicles as a trend that stainless tube producers must manage. The market cannot assume that traditional automotive exhaust demand will return.

This forces producers to find new growth areas. Data centres emerged as one of the clearest near-term opportunities during the Dusseldorf discussions.

Data centre stainless demand is growing because cooling systems are becoming more important. AI workloads, higher server density and larger hyperscale facilities require more advanced thermal management.

Stainless tubes can be used in cooling circuits, heat exchangers and wider water infrastructure. These applications often require corrosion resistance, reliability and long service life.

Gatti said the strongest opportunity may not only sit in outer water infrastructure. Inner cooling circuits also present growth potential as specifications increasingly exclude carbon steel and favour copper or stainless steel.

Copper’s high price is helping stainless steel compete. In some data centre applications, stainless can win substitution from copper on cost grounds while still meeting performance requirements.

This creates a valuable opening for European producers. Data centres are not only a volume market. They require quality, traceability, reliability and tight specifications, which fit Europe’s competitive strengths.

However, Asian competition remains a threat. If data centre projects are specified to ASTM standards, Asian suppliers may still compete strongly. This means European producers need early involvement in specifications and project qualification.

Other higher-value markets may also support growth. Specialist energy systems, premium process pipe, food processing, water treatment and industrial heat exchangers all require more complex tube products.

The key difference is that these markets reward performance rather than only price. European producers are better positioned when customers value certification, documentation, short lead times, sustainability and technical support.

This is why Europe’s competitive advantage increasingly lies in complexity. Producers cannot win every commodity segment against lower-cost imports. But they can defend and grow in applications where failure risk, qualification standards and technical requirements matter.

The next decade will likely reward producers that invest in advanced materials and difficult applications. This includes higher corrosion resistance, special dimensions, better surface quality, stronger traceability and lower-carbon documentation.

Policy could help if it is implemented carefully. CBAM and safeguards may support regional supply, but they must avoid damaging downstream processors through higher input costs or poorly designed quota structures.

The real test for Europe is execution. Producers must turn sustainability and regulation into commercial value, not only compliance costs. That means proving lower carbon intensity, shorter logistics chains and stronger product reliability.

European stainless tube trade will therefore become more segmented. Commodity and ASTM process pipe will remain import-sensitive. Automotive exhaust demand will decline. Data centres and complex industrial applications will become more important.

For producers, the strategy is clear. Europe must compete where technical standards, certification, sustainability and customer proximity matter most.

The Metalnomist Commentary

European stainless tube producers are being pushed out of low-margin commodity competition and into higher-specification markets. The winners will be companies that convert regulation, traceability and technical complexity into pricing power, especially in data centres, energy systems and premium process pipe.

EU Raw Materials Platform Targets Strategic Metals Supply Security

EU, Raw Materials Platform

EU raw materials platform development has advanced as the European Commission launched a new online mechanism to connect European offtakers with suppliers of strategic raw materials. The EU raw materials platform is designed to support demand aggregation, joint purchasing and better market information across critical supply chains.

The platform covers all 17 strategic raw materials listed under the Critical Raw Materials Act. These materials are central to batteries, rare earth magnets, defence systems, semiconductors, renewable energy, advanced manufacturing and industrial resilience.

EU raw materials platform activity will take place through structured rounds. The first diversification round will target operational projects where materials are already available or expected in the near term, with a focus on rare earths, defence-related materials and battery metals.

The mechanism will not provide financing or directly support negotiations. However, it can improve visibility across supply, demand, storage, investment opportunities and financing options, which are often fragmented in strategic raw material markets.

Demand Aggregation Could Strengthen Minor Metals Markets

Demand aggregation is the most important function of the platform. Many strategic materials are needed in small volumes by individual companies, but they carry high industrial and defence value.

This is especially true for minor metals such as gallium and germanium. These materials are used in semiconductors, optics, solar technologies, defence electronics and advanced communications systems, but individual buyers may not require large enough volumes to support new supply projects alone.

Pooling demand can change that equation. If several European buyers aggregate requirements, suppliers may see larger, more stable offtake volumes. This can improve confidence for upstream mining, refining, recycling and midstream processing projects.

The same logic applies to rare earths. Magnet makers, motor producers, defence manufacturers and clean-energy equipment suppliers often need secure access to neodymium, praseodymium, dysprosium and terbium. Aggregated demand could make European purchasing more credible to non-EU suppliers.

Battery metals may also benefit. Lithium, cobalt, nickel, manganese and graphite supply chains are increasingly shaped by long-term offtake, regional qualification and industrial policy. A shared platform can help buyers identify supply options before shortages become acute.

The platform therefore addresses a structural weakness in Europe’s critical materials strategy. Europe has strong downstream industries, but many of those industries purchase strategic metals in fragmented, company-by-company channels.

By collecting and exchanging market data, the mechanism could help convert dispersed demand into more bankable offtake signals. That is important for suppliers seeking financing, customers and predictable long-term buyers.

Platform Supports EU Diversification but Does Not Replace Financing

The EU raw materials platform is part of a broader strategy to reduce external dependencies under the Critical Raw Materials Act. Europe wants to diversify supply, strengthen domestic processing and secure access to materials needed for the energy transition and defence.

However, the mechanism is not a full project-financing tool. Negotiations will take place outside the system, and the platform will not guarantee deals or provide direct financial backing.

This limits what the mechanism can achieve by itself. Strategic raw material projects still need permitting, capital, technology, customer qualification, logistics and long-term price visibility.

But the platform can still play a useful role. It can bring buyers and suppliers into the same market framework, improve demand transparency and identify where joint purchasing could support supply diversification.

The first diversification round will be important because it focuses on projects close to availability. This avoids the problem of relying only on long-dated mining projects that may take years to enter production.

The inclusion of storage options is also relevant. Strategic materials supply security is not only about production. It also depends on inventories, emergency access, buffer stocks and coordinated procurement during disruption.

The broader platform also includes gas and hydrogen mechanisms. This shows that the EU is applying a similar strategic procurement model across energy and raw materials, where fragmented buying can weaken market leverage.

For Europe’s industrial base, the key issue is execution. The platform must move beyond data sharing and create real commercial connections between offtakers and suppliers. Otherwise, it risks becoming another policy tool without enough market impact.

For suppliers, the opportunity is clearer. A credible pool of European demand could make projects more attractive, especially in rare earths, gallium, germanium and battery materials where supply diversification is politically urgent.

The Metalnomist Commentary

The EU raw materials platform is not a financing solution, but it could become an important demand-signalling tool. Its success will depend on whether Europe can turn fragmented buyer interest into real offtake volumes that support new strategic metals supply.

China Aerospace-Grade Titanium Sponge Exports Set to Rise as OEMs Diversify Supply

China Aerospace-Grade Titanium Sponge

China aerospace-grade titanium sponge exports are expected to rise over the next five years as western aerospace supply chains look for additional qualified raw material sources. Chinese producer Chaoyang Jinda Titanium expects international shipments of qualified aerospace-grade sponge to increase from around 1,000t this year to 10,000t by 2030.

The shift reflects a deeper change in the aerospace titanium supply chain. Western aircraft manufacturers and ingot melters are trying to reduce exposure to Russian supply, while aircraft build rates are expected to rise from 2027.

China aerospace-grade titanium sponge is therefore moving from a limited export niche into a potential supply-chain balancing tool. However, tariffs, qualification risk and geopolitical uncertainty will limit how quickly US and European buyers adopt Chinese material.

The opportunity is strongest in standard-quality structural titanium grades. Premium-quality sponge for engine, landing-gear and other critical applications is likely to remain controlled by established suppliers with long qualification histories.

Western Aerospace Buyers Face a Supply-Diversification Challenge

Aerospace-grade sponge demand is expected to recover from 2027 after a weaker 2026 caused by inventory normalisation. Mills have been reducing stocks of semi-finished titanium parts and raw materials, but aircraft production plans point to higher requirements later in the decade.

The timing is important. Airbus and Boeing both carry long aircraft backlogs, creating a decade of production visibility. This forces mills and original equipment manufacturers to look beyond short-term demand swings and secure raw material sources for future build-rate increases.

Western OEMs also continue to reassess Russian titanium exposure. If procurement from Russia declines, the market will need alternative aerospace-qualified sponge to fill the gap. Japan’s Toho Titanium and Osaka Titanium are expanding, while China is preparing to supply more qualified material.

Global approved aerospace-grade sponge supply excluding Russian products is expected to rise from about 74,000t this year to around 91,000t by 2030. Demand is expected to grow at a similar pace, leaving the market sensitive to which suppliers are included in purchasing programmes.

The supply-demand picture changes significantly depending on China and Russia. Excluding both suppliers creates a tighter market. Including them creates more apparent supply availability. This makes qualification and geopolitical acceptability just as important as physical capacity.

Some US ingot producers began qualifying Chinese titanium sponge in 2024. US imports from China rose to a 10-year high of 1,069t that year, showing that buyers were willing to test Chinese material when diversification pressure increased.

However, imports fell to 155t last year and no Chinese sponge imports were reported in January-February 2026. Tariff volatility, high mill inventories and policy uncertainty discouraged further purchasing.

This shows the main barrier for China aerospace-grade titanium sponge. Aerospace qualification requires multi-year commitments, stable documentation, repeatable quality and customer confidence. Buyers will not qualify a new source quickly if they fear trade rules could change again.

Titanium is exempt from the latest 10% US tariff, and overall duties have fallen back to 40% from 60%. But the rate itself is not the only issue. For aerospace buyers, volatility can be more damaging than the actual tariff level.

A mill can absorb or price a known tariff. It cannot easily build a long-term qualification strategy around unpredictable policy. This is why US buyers may limit Chinese sponge procurement to 15-20% of requirements, even if the material is technically acceptable.

Europe and Asia-Pacific may offer more immediate export channels. China already supplies aerospace-grade sponge to buyers in those regions, supporting shipments even when US demand is limited.

Capacity Expansion Could Change the Titanium Sponge Balance

China is preparing a large wave of aerospace-grade sponge capacity additions. Several major projects are scheduled to come on line soon, with combined new capacity of around 110,000 t/yr.

The scale is unprecedented. The planned additions exceed the combined existing capacity of Japan’s Toho and Osaka Titanium, Kazakhstan’s Ust-Kamenogorsk Titanium and Magnesium Plant, and Saudi Arabia’s ATTM.

China’s expansion is driven by two demand streams. Domestic aerospace demand is rising from the Comac C919 programme and military aircraft production. At the same time, producers expect higher export demand as western OEMs diversify away from Russia.

China’s titanium mill product demand already has a meaningful aerospace base. Aerospace applications accounted for about 20% of China’s titanium mill product demand in 2025, or roughly 31,280t. The chemicals industry remained the largest segment at 48%.

The domestic base gives Chinese sponge producers a stronger platform for quality improvement. Aerospace production experience matters because sponge qualification depends on consistency over time, not only nameplate capacity.

Still, some market participants question whether all new capacity can secure international aerospace qualification. New lines may need years of operating history before western melters and OEMs accept material for aircraft applications.

This is a critical distinction. China may have large physical capacity, but aerospace supply depends on approved, audited and repeatable production. Capacity alone does not guarantee market access.

Price competitiveness may support adoption. Domestic China aerospace-grade sponge prices have recently held firm at 55,000-57,000 yuan/t ex-works because of cost pressure. That remains competitive against some western supply routes, especially if buyers need alternative non-Russian material.

However, qualification is likely to split the market by application. Standard structural titanium grades are more likely to accept Chinese sponge over time. These grades support airframes and less critical structural components where qualification remains strict but less restrictive than engine-grade applications.

Premium-quality sponge will be harder to penetrate. Engine, landing-gear and other demanding aerospace uses require deeper qualification, tighter chemistry control and stronger confidence from prime contractors and tier suppliers.

Airbus’ titanium demand outlook adds another layer. The A350 is a high titanium-bearing platform, with titanium representing around 15% of aircraft weight. As A350 production rises toward 2027 and 2028, titanium demand visibility should improve across the supply chain.

That demand pull could make Chinese material more attractive if western supply tightens. But buyers will still balance cost, qualification, geopolitics and supply security.

For Chinese producers, the path is clear but difficult. They must prove consistent aerospace-grade quality, build long-term customer trust, manage export documentation and navigate trade policy risk.

For western OEMs, the decision is strategic. China aerospace-grade titanium sponge could reduce Russia exposure and improve supply flexibility. But it also introduces another geopolitical dependency at a time when aerospace and defence supply chains are under closer scrutiny.

The most likely outcome is partial adoption. Chinese sponge may become a growing supplement for standard-quality structural grades, while established Japanese, Kazakh, Saudi and other qualified suppliers remain central to premium aerospace applications.

The Metalnomist Commentary

China aerospace-grade titanium sponge will become harder for western aerospace supply chains to ignore as aircraft build rates rise and Russian exposure narrows. The decisive issue is not capacity, but whether Chinese producers can convert new output into trusted, qualified and politically acceptable supply.

Europe Faces Challenges in Strategic Battery Funding Amid Market Oversupply

EU Battery

European countries are struggling to adopt a unified and strategic approach to funding domestic battery supply chains as global oversupply of battery materials, led by China, continues to push prices lower through at least 2030. These issues were a key focus of the Future Battery Forum held this week in Berlin, Germany.

Oversupply in Battery Materials

The battery materials market, including nickel and cobalt, faces oversupply due to significant production increases from Indonesia and the Democratic Republic of Congo (DRC). According to Siyamend Al Barazi, head of unit mineral economics at Germany’s Dera (German Mineral Resources Agency), "markets will be oversupplied at least until 2030." China's state subsidies, estimated at $230 billion from 2009 to 2023, have further contributed to this glut, maintaining downward pressure on global prices.

European Critical Raw Material Challenges

Despite the establishment of the EU Critical Raw Material Act (CRMA), which identifies 34 critical and 17 strategic materials vital to green and digital technologies, European funding efforts fall short of addressing the massive investment needs for battery material production and processing.

In September, Germany's KfW bank approved a €1 billion raw materials fund, while similar initiatives were launched by Italy, France, and the UK. However, panelists at the forum, including Jonathan Vanherberghen from Rio Tinto, argued that these amounts are insufficient for large-scale projects. For example, the capital expenditure for Rio Tinto's Jadar lithium project in Serbia alone stands at $2.5 billion.

Fragmented Funding and Industry Concerns

The fragmented funding landscape in Europe has made it difficult to pool resources effectively. Vanherberghen noted that funds like KfW’s could be more impactful if extended over longer periods to accommodate changing market cycles. Similarly, Cris Moreno, CEO of Vulcan Energy, highlighted that funding of at least $1 billion annually is required to meet the region’s ambitions. Moreno’s own lithium project in Germany has an estimated cost of $1.4 billion.

Despite the challenges, these funding initiatives provide some support by attracting institutional investors and fostering collaboration with car manufacturers, which are under increasing pressure to meet carbon targets and ESG (Environmental, Social, and Governance) standards.

Toward a Unified European Strategy

Experts at the forum emphasized the need for a more unified and sizeable funding mechanism to bolster Europe’s battery supply chain. A single, cohesive approach would allow Europe to compete with countries like China, South Korea, and Japan, where government support for raw material projects is significantly more robust.

Vanherberghen concluded, "Funds like that will only support projects with the highest ESG standards. Bringing these things together could create a much more effective system than the fragmented approach currently in place."

EU Selects 47 Strategic Raw Materials Projects Under CRMA

EU

New Projects Aim to Boost European Raw Material Independence

The European Commission has announced 47 strategic raw materials projects across 13 EU countries under the Critical Raw Materials Act. These initiatives are part of the EU’s push to reduce foreign dependence and strengthen domestic supply chains by 2030.

The selected projects span extraction, processing, recycling, and substitution of key metals like lithium, nickel, and graphite. In total, they are expected to require €22.5 billion ($24.3 billion) in capital investment, with an accelerated permitting timeline.

Lithium and Nickel Dominate Strategic Focus

Among the 47 projects, 22 are focused on lithium, 12 on nickel, and 10 on cobalt—metals vital for green energy transitions. Projects also cover graphite, manganese, tungsten, and magnesium, all critical for battery, defense, and digital industries. The EU has set targets to meet 10% of its raw material extraction and 40% of processing needs internally by 2030. Savannah Resources’ Barroso lithium project in Portugal is among the featured initiatives with strategic classification status.

Stockpiling and Geopolitical Implications

The Commission is now gathering data on national stockpiles to assess safe storage levels for critical materials across the bloc. An EU raw materials center may coordinate stockpiling efforts starting next year, aligning with global practices in the US and China.

Given global geopolitical shifts, including US leadership changes, the EU is intensifying its focus on material security strategies. Officials stress that European clean tech independence should not lead to new forms of dependency—especially on China.

The Metalnomist Commentary

The EU's selection of 47 strategic raw materials projects signals a shift toward regional autonomy in critical mineral supply chains. If executed on time, the CRMA framework could reshape Europe's role in the global energy and defense materials landscape. However, execution speed and political cohesion across member states will ultimately determine the strategy’s success.

EU Unveils Green Industry Package with Raw Material Reforms and Decarbonisation Bank

EU

New Proposals Target Lithium Supply, Industrial Emissions, and Simplified Climate Compliance Across Europe

EU Launches Broad Economic and Climate Plan to Advance Clean Tech and Raw Material Security

The European Commission has introduced a comprehensive policy package aimed at strengthening the EU's clean energy transition and boosting industrial competitiveness. The new plan includes proposals for reducing energy costs, simplifying climate reporting, and scaling joint raw material procurement, with lithium among the targeted critical materials.

Demand aggregation schemes, originally designed for natural gas, will now extend to other strategic raw materials. A proposed EU Critical Raw Materials Centre would oversee joint purchasing for participating companies, helping to reduce import dependencies and improve supply chain resilience.

Decarbonisation Bank and CBAM Overhaul Reflect Deepening Industry Support

Climate Commissioner Wopke Hoekstra reaffirmed the EU's commitment to reducing greenhouse gas emissions by 90% by 2040, while stressing that decarbonisation must be economically viable for industry. As part of this approach, the Commission proposed a new EU Bank for Industrial Decarbonisation, which could mobilize up to €400 billion—including €20 billion from the Emissions Trading System (ETS)—over the next decade.

Meanwhile, updates to the Carbon Border Adjustment Mechanism (CBAM) promise to simplify procedures and offer temporary exemptions for 90% of currently affected firms. The revised CBAM will expand to include new products and eventually require carbon intensity labeling for steel (2025) and cement.

Clean Procurement, Hydrogen Incentives, and Corporate Sustainability Rules Updated

Public procurement rules will mandate the use of cleaner industrial products starting in 2026. However, the EU’s hydrogen industry has criticized the latest draft of state aid reforms for lacking the flexibility needed to stimulate demand and close cost gaps with fossil-based hydrogen.

Additionally, the Commission eased compliance rules for around 6,000 EU and 900 non-EU firms under the Corporate Sustainability Due Diligence Directive (CSDDD). The new guidelines require alignment with the Paris Agreement’s 1.5°C climate goal. While Qatari officials voiced concern over the directive’s impact on LNG exports, the Commission clarified that fines up to 5% of global revenue would apply only to extreme violations, such as human rights abuses.

AXT to Shift Focus Amid Rising Germanium Prices: Challenges and Future Outlook

AXT

AXT, a leading US compound semiconductor supplier, is adjusting its strategy in response to soaring germanium (Ge) prices, which have significantly impacted its margins. The company, primarily known for its production of Ge substrates, announced that it would be pulling back from the germanium substrate market in the fourth quarter due to unsustainable production costs and lower margins. This decision comes after a sharp rise in Ge prices during the third quarter, driven by supply concerns stemming from China's government-imposed export restrictions.

Rising Ge Prices and Impact on AXT’s Business

The price of germanium, a critical material in semiconductor manufacturing, surged in the third quarter, tightening profit margins for AXT. As the world’s primary supplier of germanium, China’s export restrictions have created significant supply chain disruptions. As a result, AXT faced increased production costs that it was unable to pass on to customers, leading the company to pull back from low-margin Ge substrate business.

In the third quarter, AXT’s revenue from germanium substrates dropped to $1.6 million from $2.9 million in the second quarter, though this was still an improvement compared to $1.2 million from the same period last year. The decline in revenue was attributed to the inability to absorb rising material costs and the overall tightening of profit margins. Despite these challenges, AXT remains optimistic about re-entering the Ge substrate market as demand from low-orbit satellite services, such as Elon Musk's Starlink and China’s satellite launches, continues to grow.

AXT’s Shift to Indium Phosphide and Future Prospects

While germanium substrate business faces short-term setbacks, AXT is focusing on its indium phosphide (InP) product line, which has been seeing increased demand, particularly from data centers and artificial intelligence (AI) applications. InP revenue reached $6.8 million in the third quarter, driven by continued demand in AI and passive optical networks. AXT has also launched a new InP product targeting silicon photonics and electro-absorption modulated lasers (EMLs), receiving positive response and a design win from a major customer.

The company remains confident about the future of InP and its potential for growth, especially as AI and data centers continue to expand. Additionally, AXT anticipates a recovery in demand for light-emitting diodes (LEDs) and EMLs, supported by stimulus measures in China’s economy, which could bolster demand from the automotive industry. However, the company has experienced a dip in revenue from gallium arsenide (GaAs) substrates, which was $6.6 million in Q3, down from $9.1 million in Q2, largely due to lower demand and the ongoing economic slowdown in China.

Demand for Gallium and HPT Market Growth

AXT’s joint venture, which supplies gallium raw materials, saw increased demand in the third quarter, but the company’s sales of gallium arsenide substrates have slowed. This trend is in line with broader market conditions, including reduced demand in telecoms after a sharp decline last year. However, the company is still optimistic about future growth in the high-power telecom (HPT) market, driven by the 5G telecom expansion.

AXT continues to see interest from customers in China, particularly those looking for diversified gallium suppliers due to concerns over Chinese export restrictions on gallium. Despite challenges, AXT’s raw material supply chain remains stable, and the company expects growth in its core markets, particularly with 5G technology and emerging industrial applications.

Conclusion

AXT’s strategic decision to step back from the germanium substrate market reflects the company's commitment to maintaining profitability despite volatile raw material costs. While facing challenges in Ge and GaAs markets, AXT is diversifying its portfolio and focusing on high-demand products like InP. As the demand for AI, data centers, and satellite technologies grows, AXT remains poised to capitalize on emerging opportunities in the semiconductor industry, with an optimistic outlook for medium- to long-term growth.

Australia EU Trade Deal Secures Critical Raw Materials Supply

Australia, EU trade

Australia EU trade deal negotiations have concluded after eight years, giving the EU a new framework to secure stable access to critical raw materials. The agreement targets minerals including lithium, bauxite, manganese, tantalum, nickel, cobalt, copper, and rare earth oxides.

The Australia EU trade deal will cut or remove bilateral tariffs on critical raw materials and value-added mineral products. This gives European manufacturers a more reliable supply route at a time when tariffs, export controls, and geopolitical pressure are reshaping global materials trade.

The agreement also strengthens Australia’s position as a preferred critical minerals partner for Europe. Australia produces around a third of global lithium and remains a major supplier of bauxite, iron ore, zirconium, and rare earth elements.

Critical Minerals Access Becomes Central to EU Trade Policy

The EU is using the Australia EU trade deal to reduce exposure to China-dominated supply chains and rising US tariff risks. The agreement reflects Brussels’ shift from traditional trade liberalisation toward strategic supply chain security.

Critical raw materials are now central to European industrial policy because they support batteries, electric vehicles, renewable energy, defence systems, aerospace, electronics, and advanced manufacturing. Stable access to lithium, nickel, cobalt, manganese, copper, and rare earths will determine how quickly Europe can scale clean-energy manufacturing.

The deal also includes deeper co-operation on critical raw materials, including possible co-financing of key projects. This matters because Europe needs not only raw mineral access, but also investment in processing, refining, and value-added material production.

Australia Gains Strategic Value as Europe Diversifies Supply

Australia stands to gain economically and strategically from the agreement. The deal is expected to add about $7 billion per year to the Australian economy, while European producers could save more than $1.1 billion in tariffs over the next decade.

The timing is important because Europe is rapidly diversifying its strategic trade partnerships. The EU recently moved forward with trade agreements involving Mercosur and India, showing that Brussels is building a wider network of reliable raw material and manufacturing partners.

The Australia agreement still requires approval by a majority of EU member states and consent from the European Parliament before ratification is complete. However, the strategic direction is already clear: Europe wants critical minerals supply from partners with stable governance, developed mining capacity, and lower geopolitical risk.

The Metalnomist Commentary

The Australia EU trade deal shows that critical minerals have moved from procurement strategy to trade architecture. Europe is no longer simply buying raw materials; it is building alliances to secure the minerals, processing capacity, and industrial resilience needed for the energy transition.