Gallium as an Investment Commodity
Traded Purities: 99.99-99.9999%
Traded Forms: Metal
Traded Units: 1-2kg bottles
- Gallium arsenide (GaAs) and gallium nitride (GaN) wafers are used in integrated circuits for computers and ‘smart’ phones
- In the production of laser and light emitting diodes (LEDs)
- CIGS (copper-indium-gallium diselenide) thin film solar cells
- Low melt alloys
Driven by demand for light-emitting diodes (LEDs), which have become the standard for mobile and liquid crystal display (LCD) tablet, phone and television screens, the gallium market has evolved considerably over the past 2-3 years.
Since 2009, the global LED market has more than doubled in value from an estimated USD 5 billion to over USD 10 billion. The surge in demand from, and investment in, directly contributed to gallium metal spot prices doubling between 2009 to the summer of 2011.
The Indian Government (The Ministry of New & Renewable Energy) has recently commissioned Welspun Energy (part of the Welspun Group) India’s Largest Solar Power Project to date. They plan to install Solar Panels on every government building in the whole country.Within each Solar Panel there is – Indium, Gallium & Industrial Silver. In India alone there is 1.2 billion people…that is alot of Government Buildings.
Additionally, with a billion people throughout the World emerging from poverty, particularly within the BRIC Countries, being Brazil, Russia, India and China as well as Mexico and the Pacific the demand for these metals will only increase. They are as important to the world industries as water and oxygen are to humans.
Producers, however, were already making plans to accommodate greater demand through expanding production capacities. China, which had been a source of some 30-40% of refined gallium production, now has the capacity to supply up to 70% of global gallium production, after two major producers, respectively, doubled and tripled capacity in late 2011 and early 2012. In terms of global primary gallium production – that is, not including recycled materials – the world’s reliance on Chinese production is even greater.
In 2010 alone, major players including Neo Materials, Dow Electronic Materials and Albermarle Corp., announced investments exceeding USD 1.78 billion in the LED sector. Much of this has been directed into the production of gallium trichloride (GaCl3), an intermediary chemical used in the production of LEDs that consumes gallium metal. The total amount of investments made into this sector since 2009 will ensure that LED technology is central to both the mobile and LCD flat panel display markets, as well as the energy-efficient lighting industry, for many years.
Despite recent price drops and a shrinking spot market, at present, gallium has the most stable demand and, arguably, the most potential for price growth over the coming 2-3 years. Steadily growing demand for GaAs and GaN wafers, combined with rising demand from the LED sector, will mean that gallium metal will continue to be in demand from high growth industries for the foreseeable future.
Gallium also has the potential to be used in significant quantities in green energy technologies, such as GaAs solar cells and CIGS thin film photovoltaic technology.
From the supply side, growing reliance on Chinese gallium production has increased the threat of supply disruptions. As a by-product of aluminium refining, gallium is highly dependent on one of the most energy intensive metal refining industries and, for this reason, one that the Chinese government has put limitations on in the past. Just as the threat that Chinese restrictions on gallium exports would seriously impact global gallium availability and prices, so too would limitations on aluminium production, whether due to market effects, government regulations or environmental influences.
Investing in Gallium:
At current prices, gallium can be considered a safe investment among minor metals. However, investors and brokers must be consciously aware of the quality of material that they are purchasing as certain brands of gallium are more highly sought after by end-users. More than any other strategic metal, the technical aspects of gallium (that is the purity level, impurities and consistency of production) are critical to end-users.
Gallium’s classification as a corrosive material must also be taken into consideration as it pertains to higher shipping and storage costs, as well as storage conditions.
Swissmetal Inc.s´ offer Gallium in three of our rare, strategic metal Baskets – Basket A (Key Industry), Basket B (Solar & Energy) and Basket D (Defense & Aviation), which makes it now accessible for private investors to purchase and profit from the increase in demand over the years to come. Click here to contact Swissmetal for a free consultation on procurement & storage of this rare industrial metal.
Story Source: The above story was Published by SMH December 2013.