China bans export of key minerals to US as trade frictions escalate
Technology
China bans export of key minerals to US as trade frictions escalate
(Reuters) - China has banned exports to the US of items related to the minerals gallium, germanium and antimony that have potential military applications, its commerce ministry said on Tuesday, a day after Washington's latest crackdown on China's chip sector.
Beijing's directive on so-called dual-use items with both military and civilian use, which cites national security concerns and takes immediate effect, also requires a stricter review of end-usage for graphite items shipped to the US.
"In principle, the export of gallium, germanium, antimony, and superhard materials to the United States shall not be permitted," the ministry said.
The curbs strengthen enforcement of existing limits on exports of the critical minerals that Beijing began rolling out last year, but apply only to the U.S., in the latest escalation of trade tensions between the world's two largest economies ahead of President-elect Donald Trump taking office.
However, there have been no Chinese shipments of wrought and unwrought germanium or gallium to the US this year through October, although it was the fourth and fifth-largest market for the minerals, respectively, a year earlier, Chinese customs data show.
Gallium and germanium are used in semiconductors, while germanium is also used in infrared technology, fibre optic cables, and solar cells.
Similarly, China's overall October shipments of antimony products plunged by 97% from September after Beijing's move to limit its exports took effect.
China accounted last year for 48% of globally mined antimony, which is used in ammunition, infrared missiles, nuclear weapons, and night vision goggles, as well as in batteries and photovoltaic equipment.
This year, China has accounted for 59.2% of refined germanium output and 98.8% of refined gallium production, according to consultancy Project Blue.
"The move is a considerable escalation of tensions in supply chains where access to raw material units is already tight in the West," said Project Blue co-founder Jack Bedder.
Antimony trioxide prices in Rotterdam had soared by 228% since the beginning of the year to $39,000 a metric ton on Nov. 28, data from information provider Argus showed.
"Everyone will dig in their backyard to find antimony. Many countries will try to find antimony deposits," said a minor European metals trader, declining to be named.
China's announcement comes after the U.S. launched its third crackdown in three years on China's semiconductor industry on Monday, curbing exports to 140 companies, including chip equipment maker Naura Technology Group.
Trump, whose first White House term was marked by a bitter trade war with China, said he would implement 10% tariffs on Chinese goods and threatened 60% tariffs on Chinese imports during his presidential campaign.
