Gallium hit $2,269/kg and germanium $6,150/kg in the West as China's export controls created a permanent East-West price split

Summary

China controls 98% of primary Gallium production and approximately 60% of primary Germanium output. After imposing export licensing controls on both metals in August 2023, China progressively tightened the regime: a November 2025 US-China trade truce suspended the US-specific outright export ban until November 27, 2026, but left the global licensing system intact. The practical result, documented by CSIS analysis in June 2026, is that meaningful Chinese gallium shipments to the US have not resumed. Western spot gallium reached $1,850/kg in April 2026 and approximately $2,269/kg by June, against a Chinese domestic price of $246/kg, a nine-fold spread. For germanium, Western in-warehouse spot reached $6,150/kg versus China's domestic $2,674/kg, a 130% premium. Australia committed $200 million to Alcoa's Wagerup gallium recovery unit in Western Australia in 2025; MTM Critical Metals is targeting a Texas facility for 2026. Neither project reaches commercial scale before mid-2027. Gallium is used in gallium arsenide radar systems, gallium nitride power electronics, and 5G RF components; germanium is essential for optical fibres, infrared optics, and solar cells.

The split

Western defence and semiconductor analysis frames the price split as a national security problem: the US has no primary gallium production and no strategic reserve, making every high-power radar and advanced semiconductor dependent on Chinese supply. China presents its licensing regime as legitimate export management under WTO-compatible measures, not weaponisation. Japanese buyers, who source gallium for compound semiconductor manufacturing, have built 6-9 months of strategic inventory but describe sustained Western production as the only real solution. Australian and American projects (Alcoa Wagerup, MTM Texas) are on track for 2027 but will supply a small fraction of Western demand at full capacity. The November 2026 deadline for China's trade-truce suspension resets the control architecture either to the US-specific ban or to an extended truce, depending on bilateral negotiations.

By the numbers

• $2,269/kg, approximate Western gallium spot price, June 2026 (pre-controls: ~$220/kg).
• $246/kg, China domestic gallium price, June 2026 (9x gap vs. Western price).
• $6,150/kg, Western in-warehouse germanium spot, June 2026.
• $2,674/kg, China domestic germanium price, June 2026 (130% premium gap).
• 98%, China's share of global primary gallium production.
• ~60%, China's share of primary germanium production (Yunnan, Inner Mongolia).
• $200 million, Australian government commitment to Alcoa's Wagerup gallium recovery unit.
• November 27, 2026, expiry of China's trade-truce suspension of the US-specific export ban.

Why it matters

Gallium and germanium are not traded on futures exchanges and have no significant strategic stockpiles outside China. The permanent East-West price bifurcation, now three-plus years in the making, is restructuring supply chains for compound semiconductors, infrared optics, and fibre-optic components in ways that are largely invisible to broader commodity markets. Defence buyers, who use gallium nitride in AESA radar and electronic warfare systems, are most exposed: they cannot substitute, scale domestic production quickly, or absorb a nine-fold cost increase. The November 2026 truce expiry is a hard decision point: if China reinstates the US-specific ban, Western defence electronics face an acute shortage; if the truce extends, it does so from a position of demonstrated Chinese leverage rather than genuine market normalisation.

What to watch

• November 27, 2026, whether China reinstates or extends the trade-truce suspension of the US-specific gallium-germanium ban.
• Alcoa Wagerup and MTM Texas: commissioning milestones and actual recovery volumes versus nameplate.
• US DoD and DoE response: whether a gallium strategic reserve or production subsidy is authorised in the defence authorisation process.
• Western in-warehouse spot price trajectory: whether the gallium-germanium premium stabilises, widens further, or compresses on new supply entry.