Strategic Metal Report

By-Product Metals: The Aluminum-Gallium Relationship Pt. II

Now that we understand the importance of the relationship between primary metal production and the extraction of minor metal by-products, we can discuss some of the effects that this relationship has on the supply of gallium.

Driven by demand for electronics, particularly flat panel displays (FPDs) and smart phones, consumption of gallium has grown by an estimated 5 to 10 percent per annum over the past ten years. Yet, over the same period, the market price for 99.99% gallium has fallen roughly 30 percent (based on current market price of USD 290/kg for 4N gallium metal).

Gallium forecasts still predict substantial demand growth over the following three to five years, as the market for FPDs continues to expand. FPDs, such as those found in smart phones and tablet computers,

By-Product Metals: The Aluminum-Gallium Relationship Pt. I

Save for few exceptions, minor metals are produced as by-products during the process of extracting primary, often base, metals. But it is this dynamic between primary and by-product metals, which is at the core of understanding most minor metals markets, that still confounds many analysts, resulting in inaccurate assumptions and misguided conclusions.

In this two-part study, SM Report takes a look at the sometimes complex relationship between primary (or source) metals and by-product (or minor) metals in order to better understand the production and supply of such metals.

As by-products, the supply of most minor metals is heavily dependent on the extraction of source metals and, as a result, the market for the source metal heavily influences the availability of by-product metal. That is because the market for the source metal guides business decisions regarding extraction rates.

But what does this mean? The relationship between gallium and aluminum provides a good example.