Research on Global and China Germanium Industry, 2013-2017

The global output of germanium resource was about 128 tons in 2012, of which, the output in China was about 90 tons with the proportion of 70.3%. Although the United States is rich in germanium resources, the output is extremely small and this country relies heavily on imports. There are 35 germanium ore-fields have been proven in China, which own the germanium metal reserves of about 3,500 tons and the prospective reserves of approximately 9,600 ton of metal. The germanium reserves in Yunnan Province account for 33.77% all over China, and Inner Mongolia is also rich in germanium resources.

China's germanium resources supply market presents the following three characteristics:

1. The supply side is an oligopolistic market. The germanium output of Yunnan Lincang Xinyuan Germanium Industrial Co., Ltd., Xilingol Tongli Ge Refine Co., Ltd. (brown coal mining), Yunnan Chihong Zinc & Germanium Co., Ltd. and Shenzhen Zhongjin Lingnan Nonfemet Co., Ltd. (zinc smelting by-products) is about 70 tons, accounting for 90% of China's total supply volume. (Mengdong Germanium Industries has not formally put into production)

2. The supply has seasonal characteristics. The supply volume of Inner Mongolia is about 20 to 30 tons; affected by the climate factors, the germanium output is mainly concentrated in March to November. 

3. Small market scale and strong operability. Under normal circumstances, the 10 tons of germanium output of Chihong Zinc & Germanium specifically supplies for Kunming Infrared Optics (KIRO); deducting Yunnan Lincang Xinyuan Germanium Industrial's annual output of 30 tons, the overall supply of spot market is only 40 tons. If calculated at the price of CNY 10,000 / kg, the market scale would be only CNY 400 million; therefore, the market operability is very strong.

In 2012, China's germanium output was 90 tons; according to the output estimate of major enterprises, the total supply volume of China's small and medium germanium concentrates was about 15 tons. From the spot market, we learned that small and medium germanium concentrate was almost blank, and we estimated that the national stockpiling volume would be about 15 tons.

Huidian Research believes that the stockpiling of the State Reserve Bureau is conductive to decelerating the resource consumption speed, and also can help to ease the large price fluctuation, which will be helpful to the long-term development of germanium industry. Especially for the germanium metal with dominant native resource advantages, the stockpiling not only can affect the international germanium price, but also can enhance China's pricing power. The stockpiling is a long-term behavior; the State Reserve Bureau is expected to continue the stockpiling in 2013. We estimated that the stockpiling volume will be about 10 tons, which equals to the market supply reduction of 11%. By 2017, the stockpiling volume will continue to increase, and the market supply volume will be reduced to 53 tons.