Gallium prices have had an impressive run since mid-May, as end-users have been re-stocking inventory depleted since the onset of the financial crisis. Often sensitive to market demand, gallium prices have been pushed up over 50 percent during the past few months. Speaking with some major producers in China, it is apparent that the spur in demand has provided relief to an industry that experienced little action for nearly two years. Much optimism is coming from the fact that a large share of the recent demand has been from the LED industry, which has been the base of gallium demand for a number of years, but is expected to be surpassed by growing demand from the CIGS industry in coming years. The hope is that steady demand from the LED industry, coupled with increasing demand from CIGS will push the equilibrium price for high purity gallium to a new level. With little prospect of significant global primary production increases in the near future, gallium producers may have a lot to look forward to.
Although it has had strong price increases recently, SMI Ltd. expects gallium prices to stabilize for the remainder of the year, as most major purchasers have put in their annual orders and global demand remains stifled by the economic recovery in the US and Europe. Nevertheless, our SM Price Forecast Index has revised its price expectation for gallium metal up to US$ 575/kg at year-end.
Source: MinorMetals.com
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