Optimistic with the prices trend of gallium metal in 2021

Asian Metal: Hi, Mr. Chen! Thank you very much for accepting the interview. Please briefly introduce the main business of your company.

Mr. Chen: Beijing Jiya Semiconductor Material Co., Ltd. was founded in December 1999. It is a Sino-foreign enterprise jointly invested by Chinalco Shanxi Aluminum, American AXT and Hong Kong Huagang, with a production capacity of 60tpy of gallium metal.

Asian Metal: What is the current situation of Beijing Jiya's gallium metal production?

Mr. Chen: We resumed gallium metal production since early September 2020, and we basically returned to normal production levels at around 5t of gallium metal a month at the moment.

Asian Metal: Since the beginning of 2020, Chinese gallium metal mainstream prices experienced two rounds of sharp rises. What factors do you believe support the price increase and how far can it go?

Mr. Chen: I think the support of the two gallium metal increasing rounds this year is the same. They all come from the explosive growth in demand for gallium in the field of NdFeB magnetic materials. We expect the consumption of gallium in this field to be more than 100t in 2020, up by 50% YOY and the demand would continue growing in the next two years. Therefore, we are optimistic about the price trend of gallium metal in the next two years.

Asian Metal: In 2021, which areas would provide new growth points for gallium metal consumption?

Mr. Chen: In 2020, the consumption of gallium metal mainly concentrates on gallium arsenide, high-performance magnetic materials, compound semiconductors (silicon crystals) and extended products of the industrial chain. In 2021, gallium metal consumption would grow in areas such as copper indium gallium selenium, new building materials, and also gallium indium alloy thermometers as we learnt that mercury thermometers and sphygmomanometers would be banned globally in 2025.

Asian Metal: With the gradual commissioning of new factories by many producers, will the output of gallium metal increase sharply in 2021?

Mr. Chen: We learnt that around three or four producers would start to produce gallium metal this year and the new output in 2021 would increase to 80-100t. However,because some old producers are still in production shutdown or abnormal production due to raw material problems, we expect that these new output in 2021 will fill the missing amount of these old producers. Presently, China’s NdFeB magnetic material industry witnessed increased demand in the recent years, with a current consumption volume of about 100t of gallium metal this year; the global gallium arsenide industry would consume about 100t of gallium metal this year; the gallium nitride industry consumed about 40t this year and the gallium oxide industry would consume about 50-70t this year. Therefore, with the expectation of the consumption proportion, we think the supply and the demand should keep balanced in 2021.

Asian Metal: Please forecast the prices trend of Chinese gallium metal in 2021.

Mr. Chen: Chinese gallium metal downstream consumers' demand would keep strong in 2021. Imported bauxite's volume and environmental pressures will continue to increase. However, with the operation of new production lines, the output of gallium metal will also increase in 2021. If foreign countries' downstream consumers resume consumption after the COVID-19, the demand for metal gallium from the new energy industry will continue to grow, so we are optimistic about the price trend. However, we must keep alert that the high prices would affect the development of downstream industries. In order to avoid a price roller coaster, both the supply and demand sides need to treat the prices of gallium rationally.

Asian Metal: What is the sales philosophy of Beijing Jiya?

Mr. Chen: Beijing Jiya always firmly support the downstream enterprises in the industrial chain. We adhere to the three principles of good quality, good reputation and good service, and will always seek the cooperation concept of mutual understanding, mutual cooperation and common development.

Asian Metal: Thank you for accepting our interview. Wish you a prosperous business.

Mr. Chen: Thank You!