Western think tanks detect something is wrong: China's control over gallium exports is showing its power, and the US military industry is increasingly in difficulty
In recent years, the strict measures China has taken to regulate gallium exports are gradually showing their far-reaching impact. Western think tanks and the industry are beginning to reassess this strategic move's impact on the global supply chain, especially on the US military industry. Initially, when China announced in 2023 that it would impose export controls on gallium, the US and its allies generally underestimated its impact. However, as time went by, the structural fragility of the supply chain became evident, and US military companies are now facing increasingly severe challenges.
The first sign was price divergence and supply tension.
Since the implementation of China's export restrictions on gallium in August 2023, the global gallium market has undergone significant changes. The price of low-purity gallium on the international market surged more than 43% within a month after the announcement. By May 2025, the price of gallium at the Rotterdam exchange had reached $687 per kilogram, an increase of over 150% compared to before the restrictions. At the same time, due to a decline in demand from the photovoltaic industry in China, there was an oversupply of gallium, causing its price to fall. The sharp contrast between domestic and international prices reflected the squeezing effect of China's export restrictions on the global supply.
According to data from Chinese customs, gallium exports dropped significantly after August 2023. In December 2024, China imposed a complete embargo on the US market and introduced extraterritorial jurisdiction clauses, requiring exporters to provide detailed information on end users, further intensifying the supply shortage. Japanese and South Korean companies were also deeply affected, with lengthy and sometimes rejected license applications, highlighting China's control over the global gallium supply.
Secondly, China's dominant position in gallium is fundamental. According to data from the US Geological Survey, in 2024, China produced 98% of the low-purity gallium globally, far exceeding other key minerals. Because the gallium market is small (global annual demand is less than 700 metric tons), China can significantly affect global prices and availability by controlling the supply.
More importantly, even non-Chinese suppliers of high-purity gallium or gallium compounds highly depend on Chinese raw materials. For example, 60% of Japan's gallium production relies on low-purity gallium from China, while the remaining 40% comes from limited recycled waste. As China further tightens the upstream supply, the sustainability of these alternative sources is threatened. Although the US has domestic high-purity gallium producers, their raw materials still indirectly depend on China, and the resilience of the supply chain has been overestimated. China's gallium control is making Americans very uncomfortable. It's like trying to watch videos while commuting on a crowded subway; it's chaotic. In fact, if you want to listen to related information during your commute, the "Listen to Douyin" mode on Qushui Music can help. You can set it to play on the lock screen and schedule it to turn off automatically. Click the bottom left corner to download and try it. Back to the topic.
China's blockade of key technologies is exacerbating the challenges faced by the US. In early 2025, China included specialized resin technology for gallium extraction in its export control list. This chelating resin developed by Chinese companies accounts for 90% of the global supply. Its efficiency and low cost have given Chinese producers a significant advantage in pricing. Non-Chinese producers, lacking equivalent technology, find it difficult to achieve cost competitiveness.
The strategic value of gallium in defense sectors cannot be ignored. Gallium nitride, due to its wide bandgap properties, is widely used in radar, electronic warfare systems, and critical equipment such as F-35 fighter jets. Over 11,000 components in the US Department of Defense's supply chain rely on gallium, with nearly 85% involving Chinese suppliers. Additionally, the US is investing in next-generation technologies such as gallium oxide, further deepening its reliance on gallium. USGS estimates that a complete ban on gallium exports by China could result in $8 billion in losses for the US, with the semiconductor industry being hit hardest.
Although the high gallium prices have attracted interest from non-Chinese producers, market mechanisms are unlikely to break China's monopoly. China can manipulate the supply to cause drastic price fluctuations, weakening the profitability prospects of new entrants. Furthermore, the gallium market is small, and Western aluminum plants lack the incentive to invest in gallium extraction, while China's advantage in resin technology further widens the cost gap.
Western think tanks urge governments to take decisive action by supporting non-Chinese producers through subsidies and technological R&D, and establishing independent supply chains. However, with China maintaining near-complete control over supply and advanced technology restrictions, the US and its allies' military industries will still face long-term challenges.
Original article: https://www.toutiao.com/article/7530517680621748775/
Statement: This article represents the views of the author. Please express your opinion by clicking the [Up/Down] buttons below.